Examination of Witnesses (Questions 60-79)|
MONDAY 30 APRIL 2001
TEBBIT, CMG AND
60. Why are we less good at reporting now than
we were a few years ago? That seems to be a worry.
(Mr Tebbit) Because we are now much more aware as
a Department about the need to look for fraud, to raise awareness,
to report suspicions, not to be complacent, to change the culture
really. There is a culture in organisations of saying
61. That would lead to over reporting, not under
(Mr Tebbit) Well, I do not know that is the case.
The Defence Fraud Analysis Unit will look at whatever is reported
to them. I do not want to get into a situation of scaremongering
and that sort of thing in the Department but I think we did need
to raise awareness and to make people more concerned about this.
62. The more you raise awareness the more cases
you would think might come to light?
(Mr Tebbit) It is possible.
63. The numbers are going down?
(Mr Tebbit) At the moment they are.
64. I do not understand the explanation.
(Mr Tebbit) The provisional figure for 2000-01 is
121 cases presumably compared with 91 cases in 1999-2000.
65. So it is going back up. That last year may
well be a matter of awareness.
(Mr Tebbit) I cannot say.
66. You have made people more aware and they
have finally gone up but in the previous three years they were
actually coming down.
(Mr Tebbit) Yes.
67. Are you saying people are getting less and
(Mr Tebbit) I am not saying that at all. All I am
saying is there is not necessarily a direct causal connection
between the annual changes in numbers of cases and our success
in increasing our measures against fraud or, as I like to put
it, reducing the areas of risk.
68. There has to be some reason. Either the
cases are genuinely coming down or people are becoming less aware
and are reporting less. If you are saying you do not know which
it is then that is the same sort of answer. I would be worried
if you did not know which it was but it has to be one of those
(Mr Tebbit) I believe people are now becoming much
more aware of the need to report suspicions of any kind.
69. That can only be true in the very last year
when the number of the cases has gone up because before that the
number of cases was coming down and that cannot be due to extra
(Mr Tebbit) It could be. We are not in a position
to say for certain one way or the other. I am not quite sure whether
we have got a disagreement between us.
70. I cannot understand how extra awareness
from your staff of the potential for fraud and the fact they ought
to report it could of its own right have led to a decrease in
the number of cases reported.
(Mr Tebbit) I am trying to act responsibly here. 1998-99
129 cases, 1999-2000 91 cases, 2000-01 120 cases, I do not think
that shows really anything very significant in relation to your
comment either way. I happen to believe quite separately that
awareness has gone up because of all the measures we have taken
in the Department over the last two or three years.
71. I suppose you could have some sort of argument
in terms of the last three years but certainly dropping from 213
cases before seems fairly significant, it is almost half. It is
an odd thing to happen when you have greater awareness.
(Mr Tebbit) We are spending less money on property
management as a whole, that is also true.
72. Can I pass on. One thing you said earlier
was the lack of prosecutions was partly due to the difficulty
in getting evidence. Why is it so difficult to get evidence in
this particular area?
(Mr Tebbit) Because it usually requires crawling over
a mass of paper, statistics, figures, data, often it is very hard
to get all of the information you need in order to force a successful
prosecution. It is quite easy for people to argue that they were
simply slips in preparing estimates or misunderstandings. It is
very difficult to pin it down as criminal intent. This is not
an MoD specific issue. I think you will find in general this is
a difficult area.
73. You said it was specific to property.
(Mr Tebbit) Yes, property management fraud.
74. I can understand the potential difficulty
in terms of people saying it is just slips or badly estimated.
What does concern me is that you find it difficult to get hold
of paperwork. Why do you find it difficult to get hold of paperwork,
do you not have access to it or do people hide it or burn it or
(Mr Tebbit) We have had less access to it in the past
than we will under our new arrangements, that is certainly true.
As we are moving to a requirement for open book accounting we
will automatically have access to contractors' documentation and
subcontractors' documentation but we have not had that in the
75. Given you have good access now, or better
access now, can we expect the number of fraud prosecutions to
(Mr Tebbit) I would like to think that we will see
the number of fraud prosecutions go up and having access to information
will help. Although I might say with open book accounting the
risk that one would be caught out will be much greater and people
might just do what we want them to do and that is behave properly.
76. So that the proportion of cases that need
investigating will go up although the absolute number may not?
(Mr Tebbit) Well, it might not or it might just mean
that people start behaving properly.
77. We shall be watching these figures with
interest, Mr Tebbit.
(Mr Tebbit) Can I just say in this area, one area
that we have not touched on is with good IT it makes it much better,
much easier to look at general movements in who is winning contracts,
who is bidding for contracts, which contractor appears to be linked
with which particular property manager or consultant and, therefore,
to develop patterns, data mining, as it were, these techniques,
to try to look at risk reduction measures that way, to be more
proactive not simply investigating an allegation but even before
any allegations happen to see whether there are any unusual patterns
and relationships between contractors and parts of the Department
or contractors and subcontractors.
78. It sounds like good news. It sounds like
another reason why we can confidently, in the PAC, expect the
number of fraud prosecutions to go up in the future. We shall
be watching with interest.
(Mr Tebbit) Or the level of compliance to increase.
Data mining will be a technique and is a technique we are beginning
to use as our IT gets better.
79. Given it is difficult to prosecute and to
get hold of the evidence, what emphasis are you putting on fraud
prevention rather than fraud detection?
(Mr Tebbit) As I say, that is a key emphasis. As I
mentioned, we have trained virtually all of our staff now in fraud