Background

Introduction

Our Principal Conclusions and Recommendations

The level of fraud and incorrectness in payments made to Income Support claimants by the Social Security Agency

Action taken to reduce the level of errors made by Agency Staff

Action taken to reduce the level of error and fraud by customers

Quality of service provided to Income Support customers

PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT

EVIDENCE (Thursday 28 September 2000)

Mr Chris Thompson, Chief Executive and Accounting Officer of the Social Security Agency.
Mr Barney McGahan, Director of Operations, Social Security Agency.
Mr David McCurry, Benefit Security Director, Social Security Agency.
Mr John Dowdall, Comptroller and Auditor General.
Mr Brian Delaney, Department of Finance and Personnel.

APPENDIX

1. Memorandum by the Social Security Agency

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Standing Orders under Section 60(3) of the Northern Ireland Act 1998 have provided for the establishment of the Public Accounts Committee. It is the statutory function of the Public Accounts Committee to consider the accounts and reports of the Comptroller and Auditor General laid before the Assembly.

The Public Accounts Committee is appointed under Standing Order No. 55. It has the power to send for persons, papers and records and to report from time to time. Neither the Chairperson nor Deputy Chairperson of the Committee shall be a member of the same political party as the Minister of Finance and Personnel or of any junior minister appointed to the Department of Finance and Personnel.

The Committee Members were appointed by the Assembly on Monday 24 January 2000. They will continue to be Members of the Committee for the remainder of the Assembly, unless it orders otherwise. The Chairperson William Bell and Vice-Chairperson Sue Ramsey were previously appointed on 15 December 1999. The full membership of the Committee is as follows:-

• Mr Billy Bell (Ulster Unionist Party, Lagan Valley) (Chairperson)
• Ms Sue Ramsey (Sinn Fein, Belfast West) (Deputy Chairperson)
• Ms Pauline Armitage (Ulster Unionist Party, East Londonderry)
• Mr Roy Beggs Jnr (Ulster Unionist Party, East Antrim)
• Mr Mervyn Carrick (Democratic Unionist Party, Upper Bann)
• Mr Seamus Close (Alliance Party, Lagan Valley)
• Mr John Dallat (Social Democratic and Labour Party, East Londonderry)
• Mr David Hilditch (Democratic Unionist Party, East Antrim)
• Mr Donovan McClelland (Social Democratic and Labour Party, South Antrim)
• Ms Jane Morrice (Northern Ireland Women's Coalition, North Down)
• Mr Danny O'Connor (Social Democratic and Labour Party, East Antrim)

All publications of the Committee (including press notices) are on the internet at archive.niassembly.gov.uk/accounts.htm

All correspondence should be addressed to The Clerk of the Public Accounts Committee, Room 242, Parliament Buildings, Stormont, BELFAST, BT4 3XX. The telephone number for general inquiries is: 028-9052-1532. The Committee's e-mail address is: michael.rickard@niassembly.gov.uk.

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1. The Public Accounts Committee met on 28 September 2000 to consider the Comptroller and Auditor General's Report on "The Administration of Income Support" (NIA 8, Session 1999-2000). Our witnesses were:

• Mr Chris Thompson, Chief Executive and Accounting Officer of the Social Security Agency
• Mr Barney McGahan, Director of Operations, Social Security Agency
• Mr David McCurry, Benefit Security Director, Social Security Agency
• Mr John Dowdall, Comptroller and Auditor General (C&AG)
• Mr Brian Delaney, Deputy Treasury Officer of Accounts, Department of Finance and Personnel.

2. The C&AG's Report reviewed the progress made by the Social Security Agency in improving the administration of the Income Support programme since his last Report in October 1992. In particular, the Report examined the efforts made by the Agency to improve standards of benefit assessment and the effect of its actions on the level and nature of errors. Income Support benefit is paid to people aged 16 or over who satisfy certain conditions and whose income from all sources is below a statutory minimum level. In 1999-2000 total expenditure amounted to £564 million payable to around 170,000 claimants.

3. In taking evidence the Committee focused on a number of issues raised by that Report. These were:

• The level of incorrectness in payments (both over and underpayments) made to benefit claimants by the Social Security Agency;
• The action taken to reduce the level of error made by Agency staff;
• The action taken to reduce the level of error and fraud by customers; and
• The quality of service that the Agency provides to Income Support customers.

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4.1 When the Committee of Public Accounts at Westminster last looked at the administration of Income Support in 1993 it expected that the Agency's many projects to tackle error and fraud would lead to a significant reduction in the over and underpayment of benefits. We are extremely disappointed that the improvements expected by the Agency at that time have not been realised. The Committee recognises the inherent difficulties in administering Income Support payments. Nonetheless we were told that the level of error and fraud in Income Support payments is now estimated at an alarming £57 million and has risen by 36 per cent since the previous estimate in 1999. We are appalled at this enormous waste of public money from wrongly paid benefits.

4.2 The Committee welcomes the steps that the Agency has taken to deal with underpayments and those not currently claiming. However, we are dismayed at the high level of underpayment errors within Income Support awards, given that these errors mean that genuine claimants are not receiving their full benefit entitlement, and may suffer hardship. We also consider that the Agency needs to devote even more attention to targeting those people who for one reason or another fail to claim what they are entitled to. We recognise that this is a difficult area, but look to the Agency to find ways of measuring the numbers entitled, but not claiming Income Support and of using the information to direct their efforts to improve take-up.

4.3 The Accounting Officer explained to the Committee many of the actions he has taken to improve the Agency's performance on accuracy and we recognise that it has now started to secure some improvement in reducing the monetary value of administrative errors. However, one in eight awards of Income Support are still incorrect. This scale of administrative error in payments is unacceptable. It is worrying that, despite previous promises and substantial expenditure, the Agency can still only offer limited prospects of improvement in the medium term. The Comptroller and Auditor General and this Committee will continue to keep the Agency's progress in improving its accuracy levels under close review.

4.4 This is the sixth consecutive year in which the Comptroller and Auditor General has found it necessary to qualify his opinion on the Agency's Appropriation Accounts because of the level of administrative errors in benefit awards, including Income Support. This Committee takes a serious view of qualified accounts. The fact that the Agency's have been qualified six years in succession demonstrates a long-term failure to reach acceptable standards of public administration.

4.5 The Committee noted from the Agency's latest figures that taking customer error and fraud together the loss to the taxpayer is a staggering £45 million. We are disappointed that, despite the Agency's anti-fraud initiatives and significant expenditure under its security strategy, it appears to be little closer to getting a firm grip on Income Support fraud. We asked the Agency if it had set targets for reducing Income Support fraud and when it expected to bring the level of fraud under control. The Agency told us that it has set a fraud reduction target of five per cent for each of the next three years which in monetary terms equates to a reduction of £2million this year, £4million next year and £6million the following year. Given the scale of the problem we consider that these figures are relatively modest and we expect the Agency's management to give this issue sufficient priority to ensure that the targets are achieved.

4.6 The Committee considers that claimants, particularly those who are disadvantaged, need clear forms, supported by advice and guidance, if they are to claim their proper entitlement. We consider that the complexity of the application process is a cause of confusion and error and can open the door to fraud. We would urge the Agency to press ahead with its programmes to improve communication with customers and to look further at the scope for simplifying the application process.

4.7 It is clearly not acceptable for the Agency to shift work onto the voluntary sector and the voluntary sector should be properly funded for any government-related services which it provides. The Agency told us that it has taken a number of steps to ensure that throughout the organisation it is totally clear that it is the Agency's job to provide information and advice to customers and to help them fill in forms. Clearly the Agency believes that as a result of these actions the pressures for advice on the voluntary sector should diminish. These pressures should be monitored by the Agency and we recommend that it works closely with voluntary sector bodies, like the Citizens Advice Bureaux, in monitoring the volume of demands for advice on their respective organisations.

4.8 It is clear to us that the Agency has larger problems in terms of quality of service than its own survey results reveal. We recognise that there are many good staff who work in local Social Security Offices with a genuine interest in the welfare of customers. However, even for the best staff, working in a system with the levels of inaccuracy and incorrectness acknowledged by the Agency must be potentially demoralising. A real emphasis on quality of service is, therefore, in the interests both of staff and claimants.

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5. For the past six years, administrative errors in awards of Income Support have contributed to a qualification by the Comptroller and Auditor General of the Agency's Appropriation Accounts. In 1993, the Committee of Public Accounts at Westminster had expressed concerns about the high levels of error on Income Support. Since then improved accuracy and the reduction of errors had not been achieved, despite the many projects the Agency had put in place to deal with incorrectness. The Committee asked the Agency for the most up-to-date figures on the total level of incorrectness in Income Support. The Agency told us that their latest review in September 2000 projected total incorrectness in Income Support payments to be almost £57 million.

6. We asked the Agency for its view on the lack of improvement in the standard of administration on Income Support benefits. The Accounting Officer told us that he recognised that there has continued to be a level of incorrectness in the payment of Income Support since 1992 which was unacceptable. He pointed out that the benefit is complex and difficult to administer but that the measures the Agency has been taking over the last number of years, particularly in the area of administrative errors, are beginning to show some signs of success.

7. Deputy Treasury Officer of Accounts endorsed the view that the level of erroneous payments on Income Support is totally unacceptable. We also welcome his comments that the Department of Finance and Personnel promotes zero tolerance in safeguarding the public purse from such errors and that his Department will be keeping a close watch on future developments.

8. When the Committee of Public Accounts at Westminster last looked at the administration of Income Support in 1993 it expected that the Agency's many projects to tackle error and fraud would lead to a significant reduction in the over and underpayment of benefits. We are extremely disappointed that the improvements expected by the Agency at that time have not been realised. The Committee recognises the inherent difficulties in administering Income Support payments. Nonetheless we were told that the level of error and fraud in Income Support payments is now estimated at an alarming £57 million and has risen by 36 per cent since the previous estimate in 1999. We are appalled at this enormous waste of public money from wrongly paid benefits.

9. In view of the large increase in error and fraud over the last year, and the extent of incorrectness in the payment of Income Support benefits we put it to the Accounting Officer that the system appeared to be in free fall. We note his firm assurance that this is not the case. We asked the Agency why it had not taken more timely action to address the levels of error in Income Support since the Committee of Public Accounts looked at the topic in 1993. The Agency told us that it had given the problem considerable attention from the beginning and that a lot of the indicators have been positive. For example, in recent years the Chief Adjudication Officer has been complimentary about the increased accuracy achieved by the Agency which the Chief Executive considers is positive input that Agency staff can be proud of. In addition, the Agency's Quality Support Unit has estimated that the level of administrative error has decreased from £19.3 million in 1996-97 to £14.3 million in 1999-2000. The Comptroller and Auditor General told us that, while recent figures from the Northern Ireland Audit Office also suggested some improvement in the area of administrative errors, he would be qualifying the accounts again in 1999-2000.

10. The Agency told us that a key cause of error in Income Support payments is the complexity of the regulations. Consequently, the Agency considers that it would be virtually impossible to achieve 100 per cent accuracy in the processing of payments. We note the on-going actions taken by the Agency to improve accuracy rates and its commitment to further improvements over time. However, by any standards the Agency's performance in recent years has been poor.

11. The Agency's Benefit Review of Income Support in July 1999 estimated that Income Support claimants had been underpaid by £7 million, although this fell to £6 million in its September 2000 review. We asked the Agency how it could justify depriving customers from the most socially disadvantaged areas to such an extent. We also asked what steps it was taking to address the problem of those entitled to Income Support who may not be claiming due to uncertainty or lack of information. The Agency accepted that staff working on Income Support needed to redouble their efforts to ensure that they helped under-paid claimants and potential claimants to get all their entitlements. The Agency told us that the main way it was tackling the problem of underpayments was through increased visits to customers' homes. In reaching potentially eligible claimants who did not claim, the Agency told us of recent initiatives aimed at elderly people, the appointment of liaison officers to assist with claimants from ethnic minorities and the production of advice leaflets in minority languages. It is also the Agency's policy to facilitate, as far as possible, those people who want to conduct their business with them in the Irish language.

12. The Committee welcomes the steps that the Agency has taken to deal with underpayments and those not currently claiming. However, we are appalled at the high level of underpayment errors within Income Support awards, given that these errors mean that genuine claimants are not receiving their full benefit entitlement, and may suffer hardship. We also consider that the Agency needs to devote even more attention to targeting those people who for one reason or another fail to claim what they are entitled to. We recognise that this is a difficult area, but look to the Agency to find ways of measuring the numbers entitled, but not claiming Income Support and of using the information to direct their efforts to improve take-up.

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13. We asked the Agency if it considered its current accuracy target of 89 per cent was appropriate for those claiming Income Support in Northern Ireland. The Agency replied that it was looking forward and concentrating on making further improvements year on year by developing a three-year plan to try and achieve 90 per cent accuracy by 2001-02. We consider such a target level to be low and note that in the last two years the Agency's accuracy level had seen only a meagre increase of 0.06 per cent - from 86.83 per cent to 86.89 per cent. This effectively means that in around one in every eight cases the Agency has paid the wrong amount.

14.We asked the Agency what it was doing to raise the standard of its performance. It said that lastyear had been particularly difficult due to the introduction of a new system of decision-making and the demands this put on staff. However, it stressed that it had redoubled its efforts on accuracy, for instance, through more data- matching and the greater use of quality support findings. As a result the Agency felt confident that the 2000-01 year would see the accuracy level improve.

15. The Accounting Officer explained to the Committee many of the actions he has taken to improve the Agency's performance on accuracy and we recognise that it has now started to secure some improvement in reducing the monetary value of administrative errors. However, one in eight awards of Income Support are still incorrect. This scale of administrative error in payments is unacceptable. It is worrying that, despite previous promises and substantial expenditure, the Agency can still only offer limited prospects of improvement in the medium term. The Comptroller and Auditor General and this Committee will continue to keep the Agency's progress in improving its accuracy levels under close review.

16. This is the sixth consecutive year in which the Comptroller and Auditor General has found it necessary to qualify his opinion on the Agency's Appropriation Accounts because of the level of administrative errors in benefit awards, including Income Support. This Committee takes a serious view of qualified accounts. The fact that the Agency's have been qualified six years in succession demonstrates a long-term failure to reach acceptable standards of public administration.

17. In evidence to us the Agency referred to the increasing use of information technology in improving the processes and levels of accuracy in Income Support payments. In the light of the problems which the Agency had previously experienced with the computer system for Child Benefit, we asked for assurance that the computer system in place for Income Support would enable the Agency to do its job properly. The Agency accepted that the Child Benefit system could have been planned better but the Accounting Officer pointed out that he was talking about a more sophisticated system for Income Support and that he was confident that it would have the capacity to make a step change to the Agency's administration of Income Support. Given the historic levels of error in Income Support payments and the efforts needed to investigate and correct inaccurate payments the Committee will be taking a keen interest in how quickly and effectively the Agency's system improvements are able to deal with the problem of benefit error.

18. We expressed concern to the Agency about the level of error which can result from a failure by staff to properly control claims for Income Support. In particular, we were most surprised that, in many instances, Income Support assessors have failed to check the Agency's systems to confirm if claimants are already in receipt of other benefits. We are pleased to note that once the Agency received early drafts of the Comptroller and Auditor General's Report it began developing improved links between branches and these are starting to show good results. For example, the Agency told us that data matching exercises carried out in 1999-2000 between Income Support and severe disability benefit show that incorrect payments in this area had fallen from 612 cases to 165 cases. We look to the Agency to devote further efforts to ensuring that savings such as these arising from factors that are very much within its control are fully realised.

19. The fact that Agency systems and those of other Departments and agencies, such as the Inland Revenue, have not fully exchanged data in the past has left room for fraud and error. We welcome the moves the Agency is now making to match data held on its own systems in order to pick out suspicious or unusual irregularities. We asked the Agency why this had not been introduced much earlier. We were told that part of the problem has been the size and complexity of the systems for administering social security, making links between systems difficult. The Department of Finance and Personnel pointed out that issues concerning human rights and the security of information were also problems. We would underline that data-matching is a potentially powerful tool in the fight against fraud and error and we expect the Agency to plan to fully exploit it in the future.

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20. A key part of the Agency's fight against fraud has been its Security Strategy which was developed following the previous Public Accounts Committee Report in 1993. We therefore suggested to the Agency that the persistently high and growing level of fraud over the last seven years showed that the Agency's strategy had failed both taxpayers and customers badly. The Agency told us that at the outset the strategy was focused on improving its adjudication and standards of accuracy. It was only in more recent years that the emphasis has shifted from detecting to preventing fraud. The Agency told us that the more proactive action it has been taking has resulted in savings of £117 million across all benefits in the last three years, £ 43 million of this in 1999-2000.

21. The Committee noted from the Agency's latest figures that taking customer error and fraud together the loss to the taxpayer is a staggering £45 million. We are disappointed that, despite the Agency's anti-fraud initiatives and significant expenditure under its security strategy, it appears to be little closer to getting a firm grip on Income Support fraud. We asked the Agency if it had set targets for reducing Income Support fraud and when it expected to bring the level of fraud under control. The Agency told us that it has set a fraud reduction target of five per cent for each of the next three years which in monetary terms equates to a reduction of £2million this year, £4million next year and £6million the following year. Given the scale of the problem we consider that these figures are relatively modest and we expect the Agency's management to give this issue sufficient priority to ensure that the targets are achieved.

22. A related problem of paying Income Support benefits to ineligible claimants is that it can have a multiplier-effect due to Income Support providing a gateway to other benefits such as housing benefit and free prescriptions. We asked the Agency if any attempt had been made to quantify the knock-on effect of erroneous Income Support awards. The Agency's view was that this would be a huge exercise and pointed out that it cannot be assumed that because somebody is receiving Income Support erroneously that they would not have been entitled to other benefits. For example, on the basis of low income. Nevertheless, we feel that this issue has potentially profound ramifications for the public purse. We take the view that, with large-scale fraud, it is always important to get a reasonable grip on the scale of the problem if sensible judgements are to be made about the allocation of staff and resources to deal with the problem. In view of this we think the Agency should consider making an estimate of this additional element of fraud and incorrectness, perhaps using sampling techniques. The Committee would be interested to learn the outcome of the Agency's consideration of this issue.

23. We asked the Agency if it had any evidence of organised benefit fraud operating within Northern Ireland and how successfully it was dealing with cross-border fraud. The Agency told us that a specific unit set up to address the problem of organised benefit fraud within Northern Ireland had saved about £1million per year in recent years. The Agency also has a unit dealing with cross-border fraud that works closely with the Department of Social Welfare in the Republic of Ireland. This operation is presently saving around £0.25million per year. A member of staff seconded from the Department of Social Welfare is currently investigating the level of cross-border fraud and will produce a report in due course. The Committee will also be interested to learn the outcome of this review.

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24. The Committee put the question of the complexity of the application form for Income Support to the Accounting Officer. He agreed that the form was complex and that it needed to be made easier to complete. However, he pointed out that it was complex by nature because of the amount of information required for a means-tested benefit linked to the individual financial circumstances of claimants. The Agency felt that the best way forward was for the customer to fill in the form with the assistance of staff and it will be introducing pilot telephone service programmes within the next year. The Committee considers that claimants, particularly those who are disadvantaged, need clear forms, supported by advice and guidance, if they are to claim their proper entitlement. We consider that the complexity of the application process is a cause of confusion and error and can open the door to fraud. We would urge the Agency to press ahead with its programmes to improve communication with customers and to look further at the scope for simplifying the application process.

25. We raised the issue of the problems arising from illiteracy, particularly among those on low incomes, and the measures the Agency has in place to ensure that such clients are not disadvantaged in accessing the benefit system. We welcome the steps the Agency has taken to review literacy levels among its customers and its use of staff-awareness sessions on the problems customers might face as a result. We note that the Agency was one of the first organisations to receive the "Investors in People" accreditation which demonstrates that it has good training and staff development procedures in place. We also note that six of the Agency's 35 local offices now have Charter Mark awards and that other offices are working to achieve this.

26. In light of the Post Office Bill, which is currently going through the Westminster Parliament, we asked the Agency whether this could have any positive effects for its customers. In response, the Agency told us that a key part of its plans in moving from benefit payment by order book and giro cheque to credit transfer was that people could have their benefits paid into banks but accessed at post offices. The Committee will follow developments on this with interest.

27. The Committee notes that the Agency has been working to a target of clearing 87 per cent of Income Support claims in 13 days. We acknowledge that it has been successfully achieving this target, but we are concerned that 13 per cent of claimants may still have to wait unduly long for their claims to be processed. The Agency told us it recognises that it is important for those involved in the day-to-day management of local Social Security Offices to ensure that those cases falling outside the target are consistently reviewed and cleared as quickly as possible. The results of a customer service review due in November 2000 should provide the basis for further action. We look forward to continuous improvement in this area.

28. The Committee had representations from the Citizens Advice Bureaux about its concerns over a growing tendency by the Agency to off-load customers onto the voluntary advice sector and to provide poor quality advice. It is clearly not acceptable for the Agency to shift this work onto the voluntary sector and the voluntary sector should be properly funded for any government-related services which it provides. The Agency told us that it has taken a number of steps to ensure that throughout the organisation it is totally clear that it is the Agency's job to provide information and advice to customers and to help them fill in forms. Clearly the Agency believes that as a result of these actions the pressures for advice on the voluntary sector should diminish. These pressures should be monitored by the Agency and we recommend that it works closely with voluntary sector bodies, like the Citizens Advice Bureaux, in monitoring the volume of demands for advice on their respective organisations.

29. It is clear to us that the Agency has larger problems in terms of quality of service than its own customer satisfaction survey results reveal. We recognise that there are many good staff who work in local Social Security Offices with a genuine interest in the welfare of customers. However, even for the best staff, working in a system with the levels of inaccuracy and incorrectness acknowledged by the Agency must be potentially demoralising. A real emphasis on quality of service is in the interests both of staff and claimants. We were encouraged by what the Agency told us about customer feedback, a customer service review, the new Customers' Charter, "Investors in People" accreditation and Charter Mark awards. We regard Charter Mark standards, in particular, as an important measure of quality and we expect to see this programme maintained and expanded across the Agency.

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Members Present:
Mr Billy Bell in the Chair
Mr Roy Beggs Jnr
Mr Mervyn Carrick
Mr John Dallat
Ms Jane Morrice
Mr Danny O'Connor
Ms Sue Ramsey

Mr Brian Delaney, Deputy Treasury Officer of Accounts was examined.

The Comptroller and Auditor General's Report on The Administration of Income Support Benefit (NIA 8, Session 1999-2000) was considered.

Mr Chris Thompson, Chief Executive and Accounting Officer of the Social Security Agency, Mr Barney McGahan, Director of Operations, Social Security Agency, Mr David McCurry, Benefit Security Director, Social Security Agency were examined.

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* * * *

Members Present:
Mr Billy Bell in the Chair
Mr Roy Beggs Jnr
Mr Mervyn Carrick
Mr Seamus Close
Mr David Hilditch
Mr Donovan McClelland
Ms Jane Morrice
Ms Sue Ramsey

Mr John Dowdall, Comptroller and Auditor General, was further examined.

The Committee deliberated.

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Draft Report (The Administration of Income Support Benefit), proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paras 1 to 3 read and agreed to.
Para 4 postponed.
Para 5 read and agreed subject to amendment.
Paras 6 to 11 read and agreed to.
Para 12 read and agreed subject to amendment.
Paras 13 to 29 read and agreed to.
Para 4 read and agreed subject to changes to be made to reflect amendments agreed in paras 5 to 29.

Resolved, That the Report be the First Report of the Committee to the Assembly

Ordered, That the Chairman do make the Report to the Assembly.

* * * *

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MINUTES OF EVIDENCE

Thursday 28 September 2000

Mr B Bell (Chairperson)
Ms S Ramsey (Deputy Chairperson)
Mr R Beggs
Mr M Carrick
Mr J Dallat
Ms J Morrice
Mr D O'Connor

Mr C Thompson )
(Chief Executive) )

Mr B McGahan )
(Operations Director) ) Social Security Agency

Mr D McCurry )
(Benefit Security Director) )

Mr J Dowdall - Comptroller and Auditor General
(Northern Ireland Audit Office)

Mr B Delaney - Department of Finance and Personnel

I declare the meeting open. I welcome Mr Thompson, Mr McGahan and Mr McCurry. This is the second session of the Public Accounts Committee since devolution. This session provides the Committee with an opportunity to scrutinise the Social Security Agency's performance in paying income support benefits to claimants accurately and securely. This is Northern Ireland's largest cash assistance programme for the needy, the aged and the disabled. We feel that it is important to examine the problem areas that currently pose the greatest risks to the administration of income support benefit.

For the past five years, errors in awards of income support have contributed to a qualification by the Comptroller and Auditor General of the Agency's accounts. Whilst the committee recognises the efforts of the Agency to improve that accuracy, it remains very concerned at the level of error in those benefits.

Mr Thompson, when your predecessor appeared before the Westminster Public Accounts Committee in 1993, he advised that the agency had

So why has greater accuracy and reduction in errors not happened in the administration of income support benefits?

At the outset, I accept there has continued to be a level of incorrectness in the payment of income support since that Public Accounts Committee meeting in 1993 and that that is unacceptable. I note the Audit Office in its report has accepted the inherent difficulty of administering an exceptionally complex benefit like income support. I also note its support for the strong measures we are taking, and have taken over the last number of years, in trying to tighten up the administrative regime.

We have had success. Some of the indicators are beginning to show improvement, particularly in the area of departmental error. I assure the Committee that the management board of the Social Security Agency, and myself as chief executive, remain totally committed to giving the highest priority to ensuring that the right people get the right money in terms of income support.

In view of the scale of incorrectness in income support payments, the Committee would find it helpful to know the current estimates. For example, can you advise us of the most up-to-date figures you have from your Quality Support Unit and the Rolling Benefit Review figure on the level of incorrectness in income support payments?

The report has been updated with the most recent figures. With your agreement, Mr Chairperson, I will give that sheet to the Clerk at the end of the session so that it can be put on the record. Here are two or three of the headline figures. Figure 4 on page 17 of the report shows the district and overall agency accuracy levels as measured by the Quality Support Team. The final out-turn for 1998-99 is shown as 87·71% but it turned out to be 87·09%. The accuracy level in 1999-2000 was a headline figure of 86·89%.

Figure 7 on page 21 shows the estimate of cash errors on income support. We have both the 1998-99 and 1999-2000 figures. In 1998-99 the total incorrectness was £24·5 million, and in 1999-2000 it was £14·3 million.

Figure 10 on page 27 shows the benefit review. We have just completed our first year of rolling benefit review and although we have not published the final figures yet we have an indication of what they will be. I will not go through figure 10 in detail, but paragraph 2.26 on page 26 gives the headline figures, and they show the projected income support overpayments to be in the region of £35·3 million. The latest figure we have on that is £51·5 million, with underpayments potentially amounting to £5·9 million. That is a total of almost £57·4 million. Those are the absolute up-to-date figures that we have.

Are the figures that you are giving to the Clerk a more detailed version of that?

Yes. We have gone through the various figures and tables and updated all of them. Perhaps that could be produced as an annexe to the note of the meeting.

Mr Dowdall, the Committee has been given updated information by Mr Thompson in relation to the agency's quality support team findings and those from the benefits review. Will you comment on figure 6 on page 20?

Figure 6 shows the Northern Ireland Audit Office (NIAO) estimates of cash errors on income support. The latest figures that we have for 1999-2000 is £9 million incorrectness. That suggests some improvements in the agency's administration of the benefit. It is worth mentioning that we use a very small sample in our testing because we are merely trying to make a judgement on whether or not the account should be qualified. In that regard and for looking at trends, the Agency's data is probably better than mine. May I also add that as a result of our testing for all benefits paid through the agency's vote last year - including income support - we will be qualifying the accounts again in 1999-2000.

I welcome Mr Delaney, whom I omitted to mention at the beginning of the session. What is the Department of Finance and Personnel's view of the sorry tale of millions of pounds of public money being wasted? What steps has your department taken to ensure that the Agency improves its performance in the future?

The Department of Finance and Personnel promotes zero tolerance in relation to safeguarding the taxpayers' money. We endorse the comments made by the Agency and the report of the Audit Office. The erroneous payments and the knock-on effect to other benefits are totally unacceptable, as is the level of error and fraud. We support the Audit Office's opinion that we need sustained attention to maintain downward pressure to reduce the loss to the public purse. Overall, there are some good points in the Northern Ireland context, but this is a UK problem and needs tackling on several fronts.

Will you be keeping a watching brief on this too?

Indeed, Chairman.

In paragraph 2.26, page 26, you mentioned the benefit review completed in July 1999. In this report, incorrectness is estimated as £42 million, which you have now updated. By my calculation the figure is now £57·4 million. This is of great concern to the committee and the Assembly because you are not talking about a few pounds off somebody but substantial amounts of money.

Paragraph 14, on page 11, says that the programme still faces problems as millions of pounds in benefits continue to be paid erroneously, and that many claimants are also failing to receive their proper entitlement. The National Association of Citizens Advice Bureaux estimates that £12 million of benefits is going unclaimed because of poor information and advice. What steps are you taking to give practical support and advice? How many staff are employed to give support and advice on filling in forms?

In paragraph 1.5, on page 14, we are told that high rates of administrative error in the system undermine confidence in the decision-making process. How much of the overpaid or underpaid money was due to errors within the system?

Your first and last comments refer to the overall level of error. I will deal with that first and then move on to the question of supporting people in claiming all that they are entitled to.

The headline figure has gone up since our initial benefit review. That is absolutely clear. I did not go through the figures in detail, because there are a lot of them. Generally, those figures show that the rate of departmental error - the actual error rate by our staff - has gone down considerably. The headline figures mask that. It has gone down about 10% between the two reviews. What has gone up is the estimated level of fraud. That is the big area where there has been an increase in the figures.

The first time we did the benefit review, it was a new methodology and it gave a broad estimate. We have now moved through another year with increased awareness of fraud and our staff are much more comfortable with the methodology. It is probably understandable that the estimated level of fraud has gone up. We are better at measuring it and are trying to bring it out as much as we can, as the awareness of fraud increases and the estimates increase. There is a much higher level of estimated fraud, but that is giving us a sounder baseline on which to work - a baseline that we can have more confidence in.

How much of the money that was overpaid to claimants was a result of errors in the system?

The departmental error figure has gone down to £9.9 million, out of a total of £57 million. Therefore, about one fifth of the total figure is departmental error. The rest is a result of customer error and suspected fraud.

Your other point was about ensuring that people get the money that they are entitled to. Every member of staff involved in the allocation of income support also has the role of providing information and advice to people. Staff should help people with their claims to ensure that they get everything they are entitled to. Everybody is responsible for this task - it is not assigned to specific staff. We have 700-800 staff working on income support. It is their job to make sure that people get all their entitlements.

I accept that we need to redouble our efforts to ensure that this is the case. We have increased our number of visits to a greater number than ever before. These visits have two elements: one is to ensure that people are only getting the money to which they are entitled, and the second is to make sure that they are receiving everything to which they are entitled. These visits are having a really good effect in both of these areas.

The problem of the total incorrectness was mentioned in this report, and it was raised in 1993. My figures estimate that between 1993 and the present there has been a total overpayment - or total incorrectness - of £140.2 million. Given the scale of this problem, why was greater attention not given to this from the start?

This was given considerable attention from the beginning. A lot of the indicators have been positive in the last few years. For example, three years ago the level of adjudication error was about 25 per cent. Two years ago we had reduced this to 10 per cent. Last year was a transitional year - where new decision- making and appeals arrangements were introduced - so we do not have comparable figures. However, the figures we have got suggest that the situation improved even further last year. Thus our performance on adjudication has improved markedly.

In his last two reports, the Chief Adjudication Officer was very complimentary about the increased accuracy that we have achieved. He said that there had been improvements across the board. This is a positive input that the staff can be proud of. There have also been improvements in the level of error reported by the Quality Support Team. Over the last year we have had the best performance ever. The level of error has decreased from £19.3 million in 1996/97 to £14.3 million in 1999/2000. Figures for departmental error show a considerable improvement, and the Audit Office has acknowledged in its report that these indicators are sound.

I think that the whole system is in free fall. Based on these figures I do not think that you are ever going to reach 100 per cent. Can you convince me that I am wrong?

I certainly hope to convince you that the system is not in free fall, because it is not. I can absolutely assure you of that. Achieving 100 per cent accuracy in a benefit as complex as income support is virtually impossible, and I admit that up front. My experience shows that administering what is essentially a safety-net benefit will always be a hugely complex business.

If one examines the national and international picture for the administration of safety-net benefits, one finds that reaching that level of accuracy is impossible. For example, in the course of a typical year, our staff must deal with over 20 changes to the law. More than 100 guidance letters go out to staff members because of changes in how tribunals have interpreted the law or changes to procedures. In that sort of complex environment, the ability to achieve 100% accuracy does not exist, but we can do considerably better than at present. I am absolutely committed to continuing that improvement and doing a better job than in the past.

I am glad you have said you can do better, for it leads me to my next two questions. Let us look at figure 10, which shows that many income support customers have been underpaid by an estimated total of £7 million. I do not see how you can justify depriving some of those on income support who come from the most socially disadvantaged areas. It is understandable that there are errors - and we shall try to deal with them - but I am concerned, since it is very hard for people to live on normal levels of benefit even without them being underpaid.

I also have a concern about another group of people whose claims for money to which they are entitled have, for whatever reason, been dismissed. What steps are you taking to combat underpayment and the unjustified dismissal of claims?

The visiting programme I talked about is absolutely key in dealing with underpayments. Last year, we reviewed over 66,000 claims, or 40% of the total, visiting a third of the people concerned and telephoning another third. We are getting out and making contact with people in those cases. I mentioned that there are two sides to the work, the first being to ensure that we deal with customers' changed circumstances, and the second being to ensure that they receive all the money to which they are entitled. That is the main way that we tackle underpayment.

You are absolutely right, however, about the equal importance of reaching people who may not have claimed at all and may not even know that they are entitled to benefit. That is one of the biggest areas with which we must deal. In the last year, we have done a great deal of work in two particular areas.

First, we have launched a publicity campaign aimed at elderly people, drawing attention to the minimum income guarantee. As a direct result of that campaign, an extra 2000 pensioners now receive it. That figure translates to an extra £2 million in the hands of customers, with an average extra payment of about £25 a week. That is quite considerable and indicates great success. We do not intend to rest on our laurels, but to come back to the matter and do more.

The second area I should like to mention is that of people in certain categories: those suffering from social exclusion; racial and ethnic minority groups; people with disabilities; and people with learning difficulties. In the last year we have gone through an exercise working with groups representing those people - and the people themselves - to find out what barriers there are to them coming and dealing with us, and to us trying to deal with them. In the case of racial and ethnic minority groups, for instance, we are appointing liaison officers in all our offices to work with local community groups, and having leaflets produced in minority languages.

We are putting a lot more effort into our information and advice service for those customers. We have been looking at racial and ethnic minorities, people with disabilities, victims of the troubles, and the elderly. We have a positive programme for all those groups based on working with them to try to overcome the barriers to claiming benefit.

I think that is a good programme to embark on. I hope it will not take five years to get that into the community. The forms are so complex that you need 14 degrees to complete them. Considering the level of illiteracy in the North, the forms need to be made easier. The benefit office should be a one-stop shop where customers are told exactly what they are entitled to.

I agree with you entirely. The difficulty with making the forms shorter is the complexity of the benefit and the amount of information that we have to gather. The best way to do it is face to face, with the customer filling in the forms with the assistance of staff. Information technology assistance would help as well. Helping people fill in forms over the phone has also been quite successful. We will be introducing pilot phone service programmes within the next year. That is the direction we see ourselves heading in over the next two years.

I welcome the information that departmental error has been reduced to £9 million. However, I am alarmed that, if I have got it right, the overall level of mistakes has gone up to £57 million. I find that incredible. It is a huge waste of money that could be well spent on health, education or other areas of administration. Do you accept that it is a complete waste of public funds that that money is not going to its target areas, and that your department is accountable for much of that?

Yes, I accept that. We have to reduce the level of money being paid out due to customer error and fraudulent claims, as that is where the majority of the error lies. We are not taking this lightly. We have appointed Mr David McCurry as Benefit Security Director to focus on this area and achieve major improvement.

I accept that it is hard to hold you accountable for fraudulent claims, but what about individuals who have incorrectly filled in their forms? It is vital that the department processes the information provided as accurately as possible, particularly as income support is often the passport to many other funds. In effect, we could be talking about sums of money in excess of the £57 million that has been highlighted.

In your updated figures, the agency accuracy level is at 86·89%, while your target is 89%. That indicates 0·6% increase over two years, which I do not consider to be a marked improvement. What are you doing to get real improvement?

Last year was difficult because we had to introduce a whole new system of decision- making and appeals on claims. That meant retraining for all of our income support staff and getting used to a new system. That is why we didn't see the improvement we hoped to see last year. We have redoubled our efforts on accuracy. We have been using data matching in a much more significant way than before, and we are looking at ways of getting better information. When the quality support team come up with findings on levels of error, the reasons for error are most important. When we see a particular reason we go into that in detail.

For instance, one of the major areas was mortgages; recalculating mortgage interest and errors around that. In the last year we have set up centralised specialist sections to deal with this particularly difficult area. We have actually gone through every single case that has mortgage interest as part of the benefit and ensured that those cases are right. That will take time to work through into the figures, and I hope that this year we will start to see the improvement moving forward again. I accept that for the last couple of years that figure has been static. I am confident that this year we will see that figure move forward on the basis of all the work that we did last year.

I hope it comes into effect as you predict. No doubt the Audit Office will be watching closely.

The Committee will be watching as well.

The Audit Office will make us aware if there is a failure and draw it to our attention, I am sure. For six years in a row, your accounts have been deemed not to match the required level of accuracy. When do you think they are going to meet the departmental standards, so that they can be approved and accepted?

We must work on individual benefits to improve the accuracy overall, and we have to work on all of the benefits. Income support is one that is particularly prone to error, but there are others that account for very substantial amounts of money and on which we must continue to work. I cannot give you a date when we will be completely clear of qualification, but I can absolutely assure you of our total commitment to achieving that and to achieving improvement as time goes on.

I think that we have started to achieve a culture change in the organisation. The Chairperson referred to that earlier. And I think that the message about the importance of accuracy and the importance which we, as a management board, put on accuracy is starting to get through to staff and is starting to get results. For instance, this year our monitoring of new claims and the standard of accuracy in them, which is absolutely key for us, is now up to 92%. That is a dramatic improvement on previous years. We are starting to see those very major improvements feed through into the figures overall.

I appreciate that income support is a very complex system to compute and process accurately. Are you saying that a level of inaccuracy is inevitable? If so, what are you passing up to central government so that the overall system can be looked at and addressed? Perhaps something like a one-stop shop system, as another member has suggested, should be implemented. This might be simpler and easier for you to administrate. Are you interacting with central government with a view to long-term legislative changes to improve the system and make it easier to administer?

We have very close links with our colleagues in the Benefits Agency. It is outside my remit to introduce those changes. My experience shows that safety-net systems for society are always complex, because you cannot put people into little boxes. The system deals with people in a wide range of circumstances. Attempts to simplify benefits can sometimes produce very rough justice, and therefore it is my opinion that it is unlikely that we are going to see legislation which will make these benefits very much simpler to administer.

I hope you will not think that we are just throwing in the towel. First, we need to look at how we can use information technology in a more positive way to improve our levels of accuracy. Secondly, we have got to look at how we can improve our processes to make the whole system more accurate, easier for our staff to administer, and much easier for the public to understand, to ensure that they get the benefits to which they are entitled.

You mentioned the increasing use of information technology to improve the processes and levels of accuracy. Given the fiasco with child benefit, how confident are you that this will not have the same problems? Each time we asked about why there are long delays in obtaining child benefit, we were told that the new computer system did not work properly. You are putting all your hopes on a computer. A computer is only as good as the people who are using it. Do you agree?

Yes, I agree. When we were introducing a new computer system for child benefit, we could have planned it much better. I accept that. At that time, we were moving to a new building. We had problems with the telephone service, and the whole thing got very difficult. I accept that for a year or more, there was a standard of service that was unacceptable. That said, we are now using the technology much more positively and I would be very disappointed if you had not noticed a very substantial increase and improvement in the standard of service that we provide.

I think we can do better than we did for child benefit. The system that we were introducing for child benefit was an old system provided for us by the Department of Social Security in Great Britain. We had to introduce that system because of the need to have payments issued through the national system. The sort of systems that I am talking about in improving technology in the future will be much more sophisticated than that. We are at present working with a private sector consortium with a view to getting a contract to introduce much better front-end systems for our staff. That will take time to come in. We have got to plan it much better than we did the child benefit system, but I believe that it has the capacity to make a step change in our level of administration.

You would stake your reputation on it?

Yes.

That leads me on to my next point. The current ministerial target for accuracy is 89%. Was that target set by the previous Minister or the current one? Is 89% good enough for the people of Northern Ireland?

A year ago, instead of just setting a one-year target, we developed a three-year plan to try to increase the level of accuracy by 1% per year over the next three years. That in itself is a challenging target, though it may not seem so.

It seems very low to me.

Considering the constraints within which we work, if we could get 90% accuracy in the year 2001-2002, that would be an achievement. We have to look at the constraints and the processes that we have, and to try to make big inroads into them to improve that accuracy. Although we have set a target of 90% for next year, I hope that when we review the figures and set a new three-year target we will see we are doing even better.

The Deputy Chairperson, Ms Ramsey, mentioned the complexity of the form and you agreed that it is a very complex benefit, and that all that information is needed. But the Comptroller and Auditor General's report says that you do not even check with the other agencies to see if the other benefits are being claimed. It seems ludicrous to have a complex form asking for all this information and then not to act on the information when you receive it.

I agree. Since drafts of the report started to come to our notice, we have introduced better processes to ensure that our links with the other benefit branches are much sounder, and we are already seeing results. For instance, if you look at figure 8 on page 23 for the result of the first data matching, you will see that the worst figure is about halfway down the page. That refers to when 612 disability premiums were incorrectly paid on income support claims. The links between the branches dealing with severe disability benefit were not good enough. In the latest 1999-2000 data matching, we have reduced the worst figure to 165, so we are seeing major improvement there, and I hope that next time we will see an even lower figure. The total number of cases of apparent mismatches was 900 in 1998-1999. In 1999-2000 that total was reduced to 350. Again, that shows a major improvement in consistency between branches. That is starting to show good results.

People come into constituency offices - to all of us, I am sure - for assistance. I know one case very well, because he happens to be my brother. He has had to send his book back for adjustment four times in the last four months. You are talking about getting it right and paying the right person at the right time every time. Mistakes are totally unacceptable. Income support is a safety net, and it allows people to obtain other benefits. Yes, there may be people who obtain benefit fraudulently, but for people who are not getting benefit and should be getting it, there is a compound effect: they are being denied free eye-tests and other benefits to which they may be entitled. There are vulnerable people in society missing out because of inaccuracies.

You have said that you are taking steps to reach out and to try and enlist more pensioners for the minimum income guarantee of £1000 per person each year on average, according to your figures this morning. There is potential for that to become even greater, resulting in a greater workload on your staff. Will that not put them under even more pressure, because there will be potential mistakes occurring? My final point is that you mentioned minority languages when you were dealing with travellers and members of ethnic communities. Can you tell me what those minority languages are?

Regarding the effect of errors on people, I agree entirely with the point made, but at any one time, there are about 170,000 people on income support in Northern Ireland. If even one percent of those go wrong- and any organisation would be absolutely ecstatic with a one percent error rate - that is 1,700 people. I am sure that you see these people in your constituency offices. Citizens advice bureaux are seeing them, other advice-giving agencies are seeing them. That is clear. However, that is a massive area and I am not happy with even that small number getting a bad service. I want to improve that overall.

With minority languages, we will certainly be producing leaflets in Chinese, and a number of other languages relating to Asian origin, including Urdu. However, I cannot go through the precise languages at present. Irish - guidance is being issued to departments at the moment on the use of Irish in leaflets and forms - is due to be introduced in 2001. We will be complying with that guidance when it is issued.

Within the Assembly we can speak in Irish, or indeed Ulster-Scots. Therefore, if someone wants to speak in what they feel is a cultural language to them, there could be room for improvement in that respect.

People come into our offices and want to do their business in Irish. Where that is the case, we do our best, and in many offices that can be worked out. It is not a major demand, but where the demand exists we will do our best to meet it. That is our policy.

You commented on the unacceptability of the level of incorrectness. Since the publication of this report dated February 2000, incorrectness has risen to £57 million, which is an alarming figure that gives us great cause for concern. In that context, I refer you to Appendix 3. You say that within this system there are, perhaps, encouraging downward trends. However, following the Public Accounts Committee hearing in 1993, the Agency developed a security strategy. What is your opinion on the effectiveness of the security strategy? Has it been evaluated, and are you disappointed with the results, bearing in mind the upward trend in the monetary value of the incorrectness?

The persistently high and growing level of fraud over the past seven years sends a message to us, as public representatives, and to the public about the ineffectiveness of the security strategy. What is your view on the effectiveness of the security strategy?

Following the original Public Accounts Committee hearing we started to develop a strategy. Most of our initial actions were in relation to internal error and were very much focused on improving our adjudication and standards of accuracy.

We then started to focus much more on tackling fraud and error. Indeed, we published a strategy document in June 1999 on tackling fraud and error in social security. That was a key development as it represented a change in our approach. We had been awarded extra money by the Department of Finance and Personnel a couple of years before, and that enabled us to take a much more proactive approach in this area. When that money was made available to us, we attempted to move from a strategy of detection of fraud and error to a strategy of prevention of fraud and error. We have been homing in on that.

We review that strategy every year, and we produce an annual report. We are evaluating the success of that strategy all the time. There have been successes. In November 1997 new evidence requirements for benefits were introduced, and they have had a major effect in improving the accuracy of new claims - from some 78% to the current level of 92%. That is a major change.

We have introduced a regime whereby district programme protection plans are set up. These are proactive plans in each district on how to manage fraud and error more effectively. We are in the process of introducing a new system of active case management. When a benefit claim is received, the risks that might be inherent in it are examined and a series of reviews set up. We go back to the claimant at various times in the life of the claim to ensure that it is right.

Our system used to be only reactive, and we dealt with people when they came to us. Last year, however, we reviewed 40% of all claims. That is a massive effort in proactively looking at claims and trying to put them right from the start. The security strategy has resulted in savings estimated at £117 million over the last three years.

At the end of every year we know how much has been saved by our efforts. It was £43 million last year; that represents quite an achievement based on the extra resources that we received.

The proof of the pudding is in the eating, and there is still a figure of £57 million. Ministerial targets have been set in respect of the official error, but has the Agency established similar targets for reducing income support losses resulting from fraud and customer error? When does the Agency expect to be able to demonstrate that its anti-fraud initiatives have brought the level of income support fraud under control?

We have set targets for reduction of fraud and error and I would like to ask David McCurry, who is responsible for this whole area in the Agency, to give you some details of the specific targets that we have set.

We have set targets, as Mr Thompson said earlier, over a three-year period. Following the benefit review exercises that we carry out in respect of the various benefits - and the figures that you quote are from the income support review that has just been completed - we set improvement targets starting this year. For the next three years, we have set reduction levels of 5% per year - we have done that for other benefits as well, but in relation to income support it is a 5% figure in each of the three years. We will probably measure progress against that at about six-monthly intervals. The work of measurement is ongoing - it started over a year ago and those figures that you have were the first report from the first full rolling review - but about every six months or so we would expect to be able to measure progress against that target.

To come back to the processing time for an individual claim, has the time to process a claim increased or decreased over the last three-year period? I am aware that, not in your Agency but in another, the actual processing time of an individual claim has increased in some instances by 50%. What is the experience within your Agency of processing an individual income support claim to the point of correctness?

We set internal targets for the time to process a claim and we monitor that on a monthly basis to ensure that we are achieving those times. Over the last three years we have achieved our targets. We aim to clear 87% of cases in 13 days and this year we are beating that quite considerably. Our levels of clearance time have held up very well indeed over the last three years.

There are a section of people out there, Mr Thompson, who fall outside the target time. In my constituency, there are complaints about the undue time taken to process claims. If you are meeting your 87% target, what are you doing about the other 13%?

It is very important for the day-to-day management of any office to manage that tail of cases that do not make the initial target. Managers are very much aware of the need to ensure that cases that have very long periods are reviewed consistently. We must be absolutely clear that the reason for delay can be justified. Cases do go wrong, you see them and the rest of the Members see them, I cannot deny that. We are not happy with any case going wrong. We want to help people and we are always looking at our complaint procedures to ensure that we learn lessons from that, and at how we can improve the day-to-day service. We have a customer service review ongoing at present and we have already made some improvements as a result of that review. It is due to report in November and some of the things that will be recommended are really quite substantial and I hope to see improvement as a result.

I want to concentrate on the assistance that is provided to claimants. The claim form is difficult to understand and it provides three pieces of advice if you need help to fill it in - ask a friend; ask an advice centre; and, finally, get in touch with your social security office. That looks like a last resort. It has been shown that there is a level of satisfaction with how the citizens advice bureaux system works. Paragraphs 4.4 and 4.5 of the report say that the Citizens Advice Bureaux have raised serious concerns over what they view as a tendency for the Social Security Agency to offload its customers on to them. They also mention inappropriate referrals to advice agencies and poor quality of service. Why is the Social Security Agency a last resort for those seeking help, and what can be done to stop the offloading of work on to the Citizens Advice Bureaux?

I say with some confidence that we have already stopped that. We issued a statement to our own staff during the last few months making it absolutely clear that our job is to help people to fill in forms; we expect our staff to do that. We provided better training for staff, and a number of staff were put through that process during the summer. We put extra resources into offices to allow them to provide that help. Therefore we have taken a number of steps to ensure that throughout the organisation it is totally clear that our job is to provide information and advice to customers, and to help them to fill in forms.

You have changed your approach?

Absolutely. We are issuing a new customer charter in two weeks' time. That will clearly set out that if you want help to fill in a form, come to the Social Security Agency.

That said, is it not appropriate to work in close co-operation with the advice agencies in order to provide a better service, wherever the first stop is? The second and third stops need a better service too. Are you contemplating the idea of working more closely with the advice agencies?

We have had a very close relationship with advice agencies for many years at local level. If you asked the staff in most local advice centres or citizen advice bureaux about the co-operation they receive from the Social Security Agency, I think they would give a reasonably positive answer. A very strong co-operative relationship is encouraged at headquarters too; we regularly meet the senior management of the National Association of Citizens Advice Bureaux, the Association of Independent Advice Centres, the Law Centre and a number of other organisations representing particular client groups. Our whole approach is to co-operate closely with those organisations, because that is the way to provide the best service to all of Northern Ireland's citizens.

As you welcome their involvement, is there a case for somebody, not necessarily the Social Security Agency, to provide funding for their work?

They are funded by both central and local government, not through us but through the Department for Social Development.

I would appreciate a comment from Mr Delaney on the issue of funding for the Citizens Advice Bureaux.

The Citizens Advice Bureau^x are funded by the Department for Social Development. To pick up a point that was made earlier, any issues in relation to the overall block relate to the implications for funding overall. The Department provides funding to the Social Security Agency, and it is autonomous in how it manages its programme and its own administration.

You talked about visitors' attempts to help claimants with their problems, and their level of literacy was also referred to. Northern Ireland has extremely high illiteracy rates ¾ two and a half per cent higher than the European Union average. This gives rise to the assumption that many of these people are in the low-income bracket or on income support. Careful attention needs to be paid to helping people fill in these forms. You have been accused of cutting down staff training and giving inaccurate advice. What are you doing to help staff help those people to help themselves?

We carried out a full review of literacy levels among claimants towards the end of last year. As a result, we introduced staff-awareness sessions about the levels of literacy and the problems people have with that. Quite often, people do not want to admit that they cannot read or write. It is important that staff be aware of such issues. We have operated an awareness programme that deals with literacy levels as well as with claimants with disabilities and those from ethnic minority groups, who also have problems. Those courses have higher ratings than any others we have carried out and have been very successful in developing staff learning. Rather than cutting back on training, we have been doing more. We spend about £4.5 million on training in one year alone.

Are you cutting back on staff employed in training?

Absolutely not. We have increased the amount we spend on training every year. According to figures for the last few years, all income-support employees received an average of four day's training per annum on the technicalities of income support. They also receive training specific to their posts, or awareness training if certain issues arise.

We spend more on training than the average organisation. We were one of the first organisations in Northern Ireland to receive the "Investors In People" accreditation. That is important to us, not as a badge, but as a means of showing others that we invest in our people and have good training and development procedures in place.

All the nasty questions have been asked. We are interested in the quality of service that the agency provides to income support customers rather than the financial aspect. From experience, I know that many people in your department have a heart of gold when dealing with individuals. It is unfortunate, therefore, that some people are missed out. I know employees who will go to the ends of the earth to make sure that claimants receive their benefits. What is the situation across the whole of Northern Ireland? I am sure the auditor would also value that information.

Do you promote meetings of staff and managers to discuss feedback from claimants? In other words, is there a mechanism to measure the type of positive experience that I am aware of, but that others, such as my colleagues, are not?

We do promote that. Six of our offices now have Charter Mark awards. Part of that process is that the individual office has to be able to show that it regularly talks to its customers, takes feedback, and does something about it. Although six offices is only a fifth of the total, many of our other offices are currently working towards that award. It would be a very unusual office that did not have procedures in place to seek feedback from its customers.

In addition, I mentioned earlier the work that we have done with socially excluded groups. We have met the people in those areas face to face. We held three workshops - one in Belfast, one in Craigavon and one in Derry - with a large number of people from racial and ethnic minority groups. Those were superb events. They allowed us to find out what people really think about the system. Interestingly, many of them agreed with you that, individually, a lot of our staff have hearts of gold. They are excellent.

However, the picture was not as uniform as we would have liked. That is probably coming back to the point that you made. Some brought up problems in dealing with us by telephone, or said that the notifications they got were of poor quality and so they could not understand them. Issues like that came through very strongly in those sessions. That is a process that we have been carrying out over the last year, and, I think, to very good effect.

Earlier you mentioned citizens advice bureaux. You said that they are funded by the Department for Social Development. Surely that is only partly true. District councils, for instance, spend quite a lot of ratepayers' money on citizens advice bureaux. They are dealing with some of the problems of your Agency. Do you agree that they should be adequately paid for the job they are doing?

First, I thought that what I said was that citizens advice bureaux are funded by both central and local government. I hope I said that. If I did not, I should have. They also receive funding out of European money and from other areas as well. As to the adequacy of that funding, I really cannot comment. It is not my responsibility.

You have no views on it at all?

Having a reasonably funded voluntary sector and advice-giving sector is vital in Northern Ireland. That covers not only citizens advice bureaux, but also independent advice centres and many advice centres representing people with disabilities and other excluded groups. A reasonably funded advice-giving sector is essential, but I do not have a view as to whether the current funding is or is not adequate, because it is not my responsibility.

I appreciate that it would not be fair to pursue that matter.

You will know that there is a Post Office Bill going through Parliament at the moment and there has been quite a focus on the possibility of post offices assuming some of the services of government departments. The types of service you provide have been mentioned. Has there been any discussion with the Post Office about how that might operate in Northern Ireland?

The answer is yes, but I will put that into context. Members may be aware of our plans to move from payment by order book and giro cheque to credit transfer. A key part of those plans is that post offices would arrange with banks to provide a type of front-office service so that people could have their benefits paid into banks but accessed at post offices. Negotiations between the banks and post offices are ongoing. The Government clearly sees the need to ensure that people can still go into post offices to collect their benefits and a commitment to that has been made.

We have also had initial discussions with the Post Office about how we might use the post office network in a more positive way. Nationally, it is planned that there will be some pilot schemes to test whether the Post Office could work with a group of government departments and agencies in providing shared facilities. It has been suggested that Northern Ireland might be a very good area for such a pilot scheme. If that were to be the case I would be very happy to co-operate in any way possible.

Is there any need for such a pilot scheme in Northern Ireland at the moment? My information is that that idea has been dismissed. I feel, as you do, that it is essential because the situation in Northern Ireland is different. Would we have your support for such a pilot scheme in Northern Ireland?

If you know that the idea has been dismissed, you know more than I do. That is not my understanding of the situation. If it is still being considered, I would certainly be willing to discuss ideas with the Post Office.

One of the methods you have used to reduce levels of inaccuracy and fraudulent claims is data matching. That has been presented as a new science. I do not understand why it was not introduced 10 or 15 years ago. It would seem to be a very basic concept for an organisation such as yours, which has large resources and computer systems. I do not understand why data matching does not take place in every case. How up to date are your computers and your computer systems compared to those used in the private sector?

Data matching is not as easy from a technical standpoint as it would appear. The systems cannot always talk to each other. For instance, the Inland Revenue system and ours are not compatible.

Why are they not compatible? They should be designed to be compatible.

That is becoming much more the case. Ten years ago, that would not have been the norm in government departments. You may say that it should have been the norm. However, it was not.

We would like to see automated data matching, not a clerical process. The systems administering social security are huge and complex. I have read that they are the largest in Europe apart from the Defence systems. That gives you an idea of the size of the problem. Changes always have to be made to those systems because laws, procedures and structures change regularly. There is a limit to what can be done to the systems in any one year. Our systems are provided by the Department of Social Security in Great Britain, because that is the most sensible and cost-effective way. There are lots of ways in which we would like to improve the systems but it is a question of priorities.

The Department of Social Security has recently signed a new contract to out-source its information technology services to a consortium called Affinity. Part of the reason for this is to update the systems very considerably. It will start with Child Support, move into payments modernisation and then to other aspects of the modernisation of the systems. Therefore, it is a huge and ongoing exercise to update and renew those systems.

The Public Audit Forum is considering these issues and the Comptroller and Auditor General is a member of that forum. These issues are not just of a technical nature. There are issues concerning human rights, personal liberty, access to information and security for information. These are all problems, as well as the technical issues that Mr Thompson has mentioned.

Is fraud another issue?

Yes.

I refer you to page 33, paragraph 3.22 of the report, which refers to what, I suppose, will become known as the multiplier effect. This paragraph outlines the related problem of paying income support benefits to ineligible claimants. This can have a multiplier effect due to income support providing the passport to other benefits as listed on page 34. Has there been any attempt to quantify the resultant bigger fraud that has been triggered by the erroneous award of income support? Have any attempts been made with other agencies to establish the true amount - not just the £57 million that has been identified by the Agency?

Let me split that into passport benefits and benefits such as housing benefit. In relation to passport benefits, it would be impossible to come to any figure. One cannot assume that because somebody is receiving income support and is not entitled to it that they would not have been entitled to passport benefits. People can qualify for those passport benefits on the basis of low income, so they may still be entitled. It would be a huge exercise to try to come to any figure on what that costs.

I accept what you are saying, but has there been any attempt made to look at the bigger picture? Undoubtedly, the overpayments of income support have profound ramifications for the public purse. The mind boggles at what the figure might be. The Agency should make some attempt. I understand what you have said about the difficulties, but I do not believe it to be an impossibility. Some attempt should be made.

I accept your point. No attempt has been made. More things are being done to try to reduce the level of abuse on the passport benefits. For instance, on prescription charges we are working very closely with the Department of Health, Social Services and Public Safety to try to ensure that that is dealt with much more effectively than it was previously.

In relation to housing benefit, we are dealing very closely with the Northern Ireland Housing Executive, and we have taken some radical steps to try to improve that particular knock-on. We have introduced automatic feeding of information from our own systems to those in the Housing Executive. We have installed remote access terminals to allow them access to our systems. All of that is being done to minimise the knock-on effects.

To come back to your original question, despite what you say I doubt that we would be able to come to a statistically valid estimate of the level of expenditure here. We can look at it- and I would be happy to do so - but I honestly have to caution you that I do not think that the resulting figures would stand up to scrutiny.

You said that the rate of fraud shows a big increase, and there appears to be an inability to get to grips with it. I think that some assessment of the overall fraud would, perhaps, sharpen our focus and thus help us find methods of trying to save the public purse.

I would be glad if you could provide this Committee with such an estimate.

You mentioned that the system is the largest outside the Defence sector. I am assuming that the Defence system could not possibly afford the sort of inaccuracies that are in this system. If last year's figure is anything to go by, it is £10 million a year, and that is a big mistake. You talked about the percentage decrease you are hoping to achieve. Can you tell us in money terms - in costs to the public purse - what you intend to reduce it to?

I am going to pass you over to Mr David McCurry, because that is his area.

Let me explain the difference between the case accuracy levels that are shown in some of the tables. For example, the figure for income support is around 87%, and that is case accuracy. Therefore, for every hundred cases we examine, we find that 87 are right. Cases can be wrong by as little as a penny or two a week, or as much as £30 or £40 a week. We are trying to sharpen our focus on some of the cases that are wrong by large amounts, so that we can save more money. While we still intend to improve our overall case accuracy figures - and we will try to get that as high as possible, for we are not satisfied with 87%, we have set targets for 88%, 89% and 90% - we are keen to look at the cases which will give us a better return.

In my answer to a question about the level of reduction of fraud and error over the next few years, I mentioned that we have set a target of improvement- or reduction, if you like- by 5% a year. Those figures equate to about £2 million this year, £4 million next year and £6 million the following year. Those are the sort of levels of monetary value. It is all about trying to understand the difference between case load accuracy, which is the 87% figure, and the monetary value, which is about £2 million, £4 million and £6 million over the next three years.

I think that is all the questions -

I have another question on fraud. In Great Britain, occasionally the national media refer to organised fraud gangs and racketeers. Is there any evidence of that happening in Northern Ireland? Is there any evidence of fraud occurring, to a large degree, across the border with the Irish Republic? What improvements have occurred in terms of trying to reduce this two-way fraud?

Dealing with the issue of organised fraud, we have a specific unit within the benefit investigation services which looks for organised fraud and seeks to combat it, and that has been quite successful.

Have you found organised fraud in Northern Ireland?

Yes.

At what level?

I think we saved about £1 million per year over the last couple of years through addressing that, although we do not have evidence of the same levels of fraud found in some inner-city areas in Great Britain, where it is substantially greater.

As far as cross-border fraud is concerned, we have very good relations with our counterparts in the Republic of Ireland, and we have worked closely with them over the last couple of years in addressing cross- border fraud. We both have specific units dealing with this and they work together. Thanks to the work of those units we are saving £0·25 million per year. We are building on that. We have had a member of staff from the Department of Social Welfare working with us over the last six months. The aim of that secondment was to better address the issue of cross-border fraud. It is high on our priority list.

You say it is on your priority list and you have savings of £0·25 million. Are you saying there could be greater savings?

The results of the study will give us better information on that. I cannot say that there is a potential for greater savings, but we are addressing the issue urgently and we will get a better feel for what we can do when that report is complete.

It will be interesting to read that report. Thank you.

Thank you for coming. In the Assembly we are trying to improve the quality of life and well being of Northern Ireland under devolution. This committee reflects that and we intend to follow this up very closely. There is a lot of disadvantage and poverty here. Having taken into account the assurances you have given us, we are attempting to deal with that. When you come back, we would like to hear from you about big improvements in this whole area, and we do not want any excuses. Thank you very much.

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Due to the complexities which can arise in these types of cases, it can take up to two years to actually take a case through the courts system.

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