§ Earl Russellasked Her Majesty's Government:
How many people are employed, at what cost, and for how much return, in the investigation of national insurance evasion.
The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor)The deployment of staff within the Contributions Agency to pursue non-compliance is a matter for Miss Ann Chant, the Chief Executive. She will write to the noble Lord.
32WALetter from Miss Ann Chant, Chief Executive, Contributions Agency, to the Earl Russell:
As Chief Executive of the Contributions Agency I am responsible for answering questions about relevant operational matters. I have been asked to reply to your question about the number of staff employed in the investigation of national insurance (NI) evasion, the cost of such investigations and the resultant returns.
The Contributions Agency considers investigation of all cases of apparent non-compliance with national insurance law. However, it does not attempt to differentiate between cases which involve genuine mistakes made by employers and those which involve suspected evasion of liability as it is often difficult to draw a clear dividing line between these two extremes of non-compliance. For this reason the agency can neither provide details of the cost of, nor the return from the investigation of NI evasion as such. The agency's main objective is to ensure current and future compliance and to collect arrears where appropriate. It does, of course, in the process keep a particularly close eye on any employers or self-employed people it thinks may be involved in deliberate evasion. In 1992–93 the agency instigated 2,447 civil prosecutions and 18 criminal prosecutions involving unpaid Class 1 NI contributions. In the same year the figures for self-employed contributors were 85,552 and 75 respectively. Some of these prosecutions will have resulted from NI evasion.
The main method by which the agency identifies the non-payment of NI contributions is through survey visits by local inspectors. These visits are aimed at identifying employers, and the self-employed, who are not complying with national insurance law and providing advice and guidance to those requiring assistance. One of my Secretary of State's high level targets for the Agency in the 1993–94 year is to carry out 121,000 such surveys of employers. Another is to actively identify 103,000 persons with a liability for self-employed contributions. Similar targets set for 1991–92 and 1992–93 were met and exceeded by the agency. A similar scale of activity is expected during 1994–95.
The Contributions Agency is unable to provide details of the number of its officers employed at any given point in time on survey duties. My Inspectorate staff undertake a wide range of duties, including surveys, which vary according to local circumstances and management priorities. However, any officer undertaking the duties of a national insurance inspector is issued with a warrant signed on behalf of the Secretary of State for Social Security. The number of warrants in issue gives some indication of the number of officers responsible for survey duties, but not all offices who hold a warrant are regularly engaged in such activity and those who are, in the main, also undertake other tasks. As at 31 March 1993 the Agency employed 1,919 warrant holders.
33WAAnother method by which non-compliance is uncovered is through computer checks on employers' PAYE/NICs returns at the end of the year. Again though, the staff who undertake the investigations in these cases also perform other duties and the distinction between genuine mistakes and evasion is a difficult one to draw.
The Secretary of State set a target in 1992/93 for the agency to collect £231.62 million in NI arrears and £254.96 million was achieved. Another target was set to indentify £71.2 million in Class 1 NI contributions from survey activity and £89.135 million was achieved. Again we cannot say how much of these sums is attributable to NI evasion as opposed to genuine errors but they do reflect the results of the agency's compliance activities.
I regret that I am unable to give you the specific information that you requested but I hope that the information that I have provided will prove helpful. Please let me know if I can be of further assistance.