§ Mr. Bercow
To ask the Secretary of State for Education and Skills, pursuant to her answer of 28 January 2002,Official Report, column 102W, on theft and fraud, if she will make a statement on the circumstances of the incident of direct contractor fraud; and what assessment she has made of reasons for the increasing trend of theft and fraud in her Department between 1997–98 and 2000–01. 
§ Estelle Morris
I reported in my answer of 28 January 2002,Official Report, column 101W, that there had been 44 instances of direct contractor fraud since 1997–98.
They relate to instances of suspected fraud/irregularity referred to the Department's Special Investigations Unit (SIU) for investigation and cover the European Social Fund, Schools, Training and Enterprise Councils, Teacher Pensions and miscellaneous Programme Budgets.
The nature of the problems identified relate primarily to claims for services not properly provided or for inflated costs.
Within my Department we have, over the last few years, run a Fraud and Control Awareness campaign to raise staff awareness as to their responsibilities for reporting and handling suspicions/allegations etc. We 1542W are satisfied that those reporting systems now work well, and that, as a result, all concerns are properly reported and investigated.
My Department recognises the importance of having sound control systems in place to combat the threat of fraud. In fact 30 per cent. of the cases investigated were identified as a result of the operation of normal control procedures.
We regularly review the contract management arrangements in place to ensure effective control over public funds and take steps, where necessary, to enhance procedures. For example, since April 2000, in agreement with the European Commission, the Department, through its Government Offices, has introduced new financial monitoring and inspection arrangements with regard to ESF, some of which has resulted in cases being referred to SIU.
In my earlier response, the estimated cost to the Department for 2000–01 is shown as £17.3 metre, which, when shown against the earlier years' figures, suggests a substantial increase. However this figure includes some exceptional items to the value of £14.9 metre.