§ Mr. DewarTo ask the Secretary of State for Social Security what savings he expects will arise from the introduction of benefit payment cards; and if he will set out the basis on which this calculation is made, together with the multiplier used. [23007]
§ Mr. ArbuthnotAnnual savings will comprise both administrative savings and programme savings.
The administrative savings comprise costs associated with certain aspects of the order book and girocheque payment systems which would no longer be incurred, or would be significantly reduced, once card payment replaces them. These include administrative procedures associated with the loss of theft of instruments of payment and the actual production of order books and girocheques. The feasibility study estimated savings to be £60 million per annum.
The programme savings are those resulting from a reduction in fraudulent encashments of instruments of payment. Our estimate of the level of this type of fraud is not by use of a multiplier but rather from sampling of encashed order book foils and girocheque reconciliation. Once fully implemented the new payment system is expected to eliminate fraudulent encashment estimated in the feasibility study at £140 million per annum.