§ Mr. WorthingtonTo ask the Secretary of State for Education and Employment (1) what undertakings were given by the Employment Service to Mr. Thomas Docherty in respect of remedying the faults in the NUBS2—national unemployment benefit system—computer programmes; and which undertakings have been implemented to date; [1567]
(2) how many former students and others have paid excess taxation as a result of administrative errors by the Employment Service through faults in the NUBS2—national unemployment benefit system—computer programmes; and what sums of money were involved; [1569]
(3) for what reasons (a) students and (b) others have been given non-cumulative codes by the Employment Service on ceasing a period of unemployment benefit and taking up full-time employment; [1571]
(4) if the Employment Service has complied with pay-as-you-earn regulations in the issue of code numbers to former students taking up work and ceasing to be on unemployment benefit; [1598]
(5) what priority was given to the introduction of the jobseeker's allowance, in respect of work on his Department's computer system; and how many people were diverted from the NUBS2—national unemployment benefit system—programme to the JSA project; [1599]
(6) when she first evaluated reports that the NUBS2—national unemployment benefits system—Employment Service computer system was faulty; and what was the date of inception of the system; [1566]
(7) what reports she has received from the Inland Revenue about the taxation policy of the Employment Service regarding the accuracy of and procedures followed by the Employment Service in the initial 374W taxation of (a) former students and (b) others; when she evaluated these comments; and what action she took; [1568]
(8) what factors underlie the decision to allow the Employment Service to administer the taxation of former students; and what plans she has to transfer this work to the Inland Revenue; [1570]
(9) if she will list the faults identified in the Employment Service computer programme; when they were identified; how many clients have been affected and in what ways; and what action has been taken to remedy the deficiencies; [1572]
(10) on what occasions the Employment Service submitted requests to the change control board to remedy errors in the Employment Service computer affecting the taxation of former students; and what responses it has received; [1597]
(11) what changes to improve the tax system were postponed to accommodate the jobseeker's allowance programme. [1601]
§ Mr. ForthResponsibility for the subject of the questions has been delegated to the Employment Service agency under its chief executive. I have asked him to arrange for a reply to be given.
Letter from M. E. G Fogden to Mr. Tony Worthington, dated 4 November 1996:
As the Employment Service is an Executive Agency, the Secretary of State for Education and Employment has asked me to reply to your questions concerning tax issues. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.I will answer the questions in the order they will appear in Hansard.Question 1567:In his correspondence with the Agency Mr Docherty has not sought any undertakings, nor were any given.Question 1569:It is not possible to provide an exact figure of the number of clients affected. However, from mid June through to the end of July the number of claims registered reaches a peak. This peak can be attributed to full-time education leavers. Based on these figures. and taking into account the phased installation of the NUBS2 system (between February 1992 and September 1994), we estimate that up to 70,000 clients were affected in each of the four years in question. These figures assume that all ex-student clients found employment within the same tax year as they made their claim. As this will not have been the case it is fair to say that these figures are if anything over-estimates. It has proved impossible to obtain figures for the amounts of tax involved.Questions 1571 and 1598:
- (a) Due to a programming error with the NUBS2 computer system, students who have never worked and signed off in the same tax year were incorrectly allocated a non-cumulative tax code.
- (b) Other claimants who are unable to supply a P45 from their previous employer are correctly allocated a non-cumulative code until IR can provide us with an up to date tax record. For some people, this may not have occurred before they find new employment. This is in accordance with the PAYE regulations.
Question 1599:As it was new legislation, Jobseeker's Allowance (JSA) had to be given the highest priority. It was therefore essential that the Employment Service could meet all its commitments up to and following the introduction of JSA. I cannot provide details of the 375W number of people who moved from NUBS2 to the JSA project as there was a constant exchange of staff between the projects, according to workload and priorities.Question 1566:The Agency was first notified of a potential problem regarding tax codes in a letter from the Inland Revenue (IR) dated 19 December 1994. Investigations in January 1995 confirmed that this was indeed a fault with our system. The NUBS2 system national roll-out program began in February 1992.Questions 1568 and 1570:Since (the Act) in 1982, the Agency and previously the Department of Employment have been required to operate a modified PAYE system, and has maintained communication with IR in doing so. In the course of these exchanges, IR raised this problem with us. As always, we take on board their comments and endeavour to work with them to find solutions to any problems identified. Following their intervention, a clerical solution was developed to identify and rectify these cases. As the responsibility for the processing and payment of JSA now resides with the Benefits Agency (BA), any questions regarding future plans should be addressed to them.Question 1572:At the time of handover (7 October) to BA there were 512 identified problems with the NUBS2 system. All these problems had interim solutions. Instructions were issued to all offices in the form of a problem guide. System manuals were amended to reflect how the system was operating. In addition, assistance was available to offices at both a regional and at national level. A total of 1673 faults have been identified with NUBS2 over the period that it has been operational. It is not possible to state the number of clients affected, as system problems frequently had no impact on the client. Any system fault that adversely affected the client was always given the highest priority for rectification.Question 1597:The change request was originally submitted to the Change Control Board in March 1995. At that time it was accepted as a high priority and scheduled for introduction in October 1995. In September/October 1995 the change was reviewed in the light of the emerging priorities arising from the legislation to introduce JSA. It was then decided that since the problem would be corrected in the Jobseeker's Allowance Payments System, it should be controlled by clerical procedures. The Change Control Board reviewed the position again in January and May 1996, but on each occasion was unable to reverse their decision.Question 1601:The only other tax change involved was one regarding notifications of direct payments of Income Support from the Benefits Agency to the client. In this case additional procedures were combined with the action to take upon receipt of a direct payment notification which ensured that this problem had no affect on our clients.I hope this helps to clarify the position.