HC Deb 28 January 2002 vol 379 cc12-4
7. Mr. Richard Bacon (South Norfolk)

If he will make a statement on the extent of and reasons for the irregular expenditure by his Department which has caused the Department's current financial statements to receive a qualified opinion from the Comptroller and Auditor General [28145]

The Secretary of State for Work and Pensions (Mr. Alistair Darling)

The Department's accounts have been qualified since 1988 for two main reasons. The first is fraud and error. Despite the first-ever reductions in fraud and error, the levels remain unacceptably high. The second problem is the poor state of the Department's information technology, which makes it impossible to track payments through the system. That problem is being addressed by a multi- million pound investment programme that will steadily replace the Department's out-of-date computer systems.

Mr. Bacon

I am grateful to the Secretary of State for his reply. Will he tell the House whether he has a target date for the publication of a set of accounts that are not qualified because of fraud? Does he understand how much hard work goes into earning the money paid in tax that his Department then loses? If he takes fraud extremely seriously, as he said in an earlier answer, will he explain why he has still not answered my written question of 8 January?

Mr. Darling

In relation to the written question, I shall certainly make inquiries to see what has happened.

On the more general point, I have said repeatedly this afternoon that the level of fraud and error in the system is unacceptably high, and has been so for many years. As I said, the accounts of the former Department of Social Security were qualified from 1988—indeed, according to the criteria used by the National Audit Office, they should have been qualified from 1948.

The replacement of our IT systems, now under way, will enable us to track payments more accurately than we have done in the past. We have introduced other measures that have brought about a reduction in fraud and error of 18 per cent. in income support and the jobseeker's allowance. Those measures will be spread across the whole Department and we shall steadily bear down on fraud. But I have to tell the hon. Gentleman that I fully expect the next set of accounts to be qualified, and they are likely to be qualified for some time to come, until that investment and those improvements are fully put in place.

Mr. Peter Pike (Burnley)

My right hon. Friend has rightly said that none of us condones fraud. Does he think that there is full compatibility between computer systems in local authorities and various Departments using national insurance numbers to ensure that fraud is cut to an absolute minimum, by using those systems far more effectively than perhaps we have done in the past?

Mr. Darling

I agree with my hon. Friend. The short answer is no, the information technology systems are not compatible at the moment, but that will improve year on year. That is particularly important with regard to housing benefit for local authorities, but we are replacing the Department's entire IT system. That should have happened at least 10 years ago; it is now well under way, and it will have a significant impact on our ability to control fraud and error in the system.

Mr. Patrick McLoughlin (West Derbyshire)

Does the Secretary of State understand that no one will think his Department is acting properly so long as we receive letters from Ministers that include paragraphs and sentences such as this: To take no account of DLA or SDP would have significant expenditure implications for the ILF, and the Terms of Reference of the quinquennial review required of the ILF's policies"? How on earth is anyone supposed to understand anything that goes on in that Department?

Mr. Darling

I hope that I did not sign that letter. If I did, I shall have another look at it. I do not understand it either, so I shall cause inquiries to be made.

The hon. Gentleman raises a serious point, to which I attach some importance: in the past, too many letters from the former Department of Social Security, and I dare say other Departments, have not been written in a way that people would readily understand. We are making determined efforts to try to improve that, but just occasionally the odd letter slips through the net, and I hope that he will forgive us.