§ Mr. RedmondTo ask the Secretary of State for Social Security if the computer error involving the loss of £44.5 million from his Department's social fund has yet been traced and rectified; and if he will make a statement.
§ Mr. ScottThe administration of the social fund is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member.
Letter from Michael Bichard to Mr. Martin Redmond, dated 28 February 1994:
The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking about the computer fault which affected the Social Fund.I have assumed that your question refers to the recent report by the Comptroller and Auditor General on the Social Fund Account for 1992–93. You will be aware that this highlighted a difference between the amount of loans outstanding shown in the Social Fund Account, and the corresponding figure from the local microcomputer system. The main cause of this problem has been traced to a fault in the computer program which adds up individual loan balances on the microcomputer system. This resulted in certain categories of loans (amounting to an estimated £44.5 million) being excluded from the statistical report of total loans outstanding at the end of each month.The Comptroller and Auditor General confirms that there was no evidence that this fault has led to a cash loss; individual loan records have not been affected. He also acknowledges the considerable progress made by the Benefits Agency in resolving these accounting problems.The Agency is currently introducing a new Social Fund computer system which will be fully operational by May 1994. This new system has been designed to provide a fully integrated national network, resolving the weaknesses of the original microcomputer system by capturing all categories of loans outstanding.I hope you find this reply helpful.