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Baroness Hollis of Heigham: The amendment seeks to add other government departments and agencies to the list of bodies from which authorised officers could require information. I entirely endorse what my noble friend Lord Grabiner said. The DSS already has powers to obtain information from relevant government departments and agencies in order to address social security fraud and error. Those provisions were introduced by the previous administration under the Social Security Administration (Fraud) Act 1997.

Therefore, we work with other departments, including the DVLA, to obtain information in relation to, for example, people starting work, claiming tax credits and entering prison. Information is generally obtained in bulk and data-matched with social security records in order to identify inconsistencies which are to be pursued. In the first three-quarters of this year, those data matches identified nearly 135,000 cases for investigation and almost 24 million of overpaid benefit. The department has the same relationship with local authorities.

Therefore, we do not need the power which the amendment seeks to introduce. Indeed, if the power were granted, it could allow not only the DSS but local authorities to acquire information from the security services, the Foreign Office, the MoD, the Home Office and the Department of Health, all of which have highly sensitive files. Therefore, I do not believe that it would be wise to follow that path. As my noble friend rightly said in his report, we do not need the power. We require information from the private sector, and that is what the Bill seeks to obtain.

Lord Higgins: Liberty will be happier with the response of the noble Baroness to this amendment

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than it will with her response to the previous one. Once again, we are grateful to the noble Lord, Lord Grabiner, whose excellent report, as he rightly points out, deals with this problem. I was not quite clear to what extent there was compatibility with regard to computers. I believe that the noble Lord, Lord Grabiner, said that his diagram covered the Treasury and the Inland Revenue--that is, the two revenue departments. However, I was not clear from the Minister's reply whether it covered the DVLA.

Baroness Hollis of Heigham: I said that the DVLA was included.

Lord Higgins: However, I gather that it does not cover a number of other areas which the noble Baroness specified. In addition, I am not entirely clear whether the exchange of information on the scale which she mentioned takes place on an electronic basis or whether--

Baroness Hollis of Heigham: It is on a data-matching basis.

Lord Higgins: I understand; it is data matching on an electronic basis. Given the schizophrenic approach which I have taken to this amendment, I rapidly beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord Higgins moved Amendment No. 17:


    Clause 1, page 2, line 23, at end insert--


("(2AA) Any authorised officer wishing to obtain information under this section shall make an application to the person holding it through that section of the Department of Social Security responsible for the investigation of fraud.").

The noble Lord said: We have also tabled Amendment No. 18, which is the mirror image of Amendment No. 17. I am not sure whether one should call this amendment the "single exit provision" and the other amendment the "single entry provision", or whether it should be the other way round. However, essentially we are saying--I consider it to be important--that inquiries by the department should be made centrally rather than that the department should have a whole range of investigating officers who make inquiries to the increased cost and trouble of the various organisations specified in the earlier amendments which we have been discussing.

I believe that it would be helpful to know exactly what the Minister proposes to do about that. We have already pointed out that the department has a considerable number of regional offices and an even larger number of--

Baroness Hollis of Heigham: Perhaps the noble Lord will allow me to intervene. I confess to having totally misunderstood the push of his amendment. My understanding was that he was anxious to ensure that all local authority inquiries came through the DSS and that, therefore, there would be no direct access.

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If that is not what he seeks to achieve through this amendment--certainly, everything that he has said so far suggests that he is not going along that line--I am not sure whether the fault lies with us or with the drafting. However, that was our understanding, and I wonder whether the noble Lord would prefer to return to this issue on Report. We certainly envisaged a push in a very different direction from the one which he has specified. I am happy to explore the issue of local authorities and the DSS, but our lawyers' reading of the amendment took us in a different direction from that which the noble Lord is pursuing.

Lord Higgins: I must confess that the amendment is a poor thing. It was drafted by me and therefore may not meet the high technical standards that the department requires. Having said that, I considered that what it sought to achieve was clear. It states:


    "Any authorised officer"--

we are clear who they are--


    "wishing to obtain information under this section"--

that is, Clause 1--


    "shall make an application to the person holding it"--

banks, building societies or whatever--


    "through that section of the Department of Social Security responsible for the investigation of fraud".

Therefore, the information should be sought through the department. That may be information from the department itself, from one of its regional offices, or, as the noble Baroness supposes, from local authorities.

We seek to suggest through the amendment that the inconvenience caused to the mostly unpaid organisations, with which we dealt earlier, should be as minimal as possible. Clearly, that is likely to be the case if the department has a central organisation which is responsible for the investigation of fraud. That organisation would then put the requests to the individual companies or other organisations from which it wished to obtain the information. That is the amendment's simple purpose.

Clearly, two categories are involved: government departments and local authorities. We might consider whether it was appropriate for local authorities to act in the specified manner; otherwise, the electricity industry, for example, would have a mass of inquiries from 409--I believe that that is the right figure--local authorities seeking to prevent housing benefit fraud which felt that they must approach the industry. Such a shotgun effect on the electricity industry would be likely to cause a great deal more trouble than would otherwise be the case.

If the noble Baroness has a totally different interpretation of the amendment, she will no doubt let us know, and we can take our debate from there. I beg to move.

Baroness Hollis of Heigham: I am afraid to say that I do have a different interpretation. Our understanding is that the amendment would prevent local authorities from making any direct inquiries of the information providers listed in the Bill. Instead, local authorities would be obliged to channel all their

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inquiries through the Department of Social Security. The noble Lord's opening remarks primarily concerned other government departments and regional offices of government. Our point is not that the amendment is technically defective; it may or may not be. We simply misunderstood where the noble Lord was coming from.

The noble Lord moved on--I should not dream of suggesting whether or not he did so as a result of my prompting--to discuss local authorities. Local authorities need the relevant powers. They have a statutory duty to carry out the secure administration of the housing benefit and council tax benefit schemes. That includes investigating fraud against those benefits. Local authority investigators are properly trained. In its report published today, the Audit Commission acknowledges the progress made by local authorities in combating fraud. It recognises--I stress this is the Audit Commission, not us--that improved fraud prevention measures have led to a 30 per cent reduction in detected fraud.

I understand the noble Lord's argument: he wishes to reduce the implications for those bodies that receive requests for information. However, we are also concerned to track fraud. We estimate that housing benefit fraud costs 600 million a year. That represents an unacceptable drain on the public purse and we must do all that we can to tackle it. We need and want to give powers to the DSS and local authority authorised officers so that we can tackle benefit fraud wherever we find it. Much of that fraud will occur at a local level and will be specific to an individual local authority.

We recognise that there may be concerns about the performance of some local authorities in carrying out those duties, and we have stipulated in Clause 2 that local authorities may have online access to information providers only with the express consent of the Secretary of State. Different requirements apply to the making of a written request, the relevant provisions for which are contained in Clause 1. The provisions in Clause 2 will assure us that proper and acceptable management controls are in place with regard to the use of online access. Inquiries to those information providers that provide their information online through the DSS will have to be routed until they gain the Secretary of State's authority. To require them to route all inquiries through the DSS would be an unnecessary administrative burden for both parties.

The effect of the amendment on local authorities would be to create an extra stage in the process of information gathering that would create unnecessary delays in resolving benefit entitlement, especially with regard to housing benefit, which is one of the three major areas of fraud. The other areas involve undeclared earnings although one is working and cohabiting while claiming lone-parent benefits.

There would be a considerable risk of reducing the efficiency of DSS fraud investigators because they would inevitably have to read through the case referred from local authorities to establish the nature of the inquiry and to whom it should be addressed. They would also have to receive and pass back the

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replies received--somewhat like a post-box--to the local authority, but there would be no parallel saving for local authorities. Local authorities would still generate the same number of inquiries but would simply be prevented from dealing with them in an efficient way.

I suggest to the noble Lord that the amendment would create a substantial duplication of effort and extra cost. Each time there is a hand on, if I may put it that way, the possibility for error and fraud increases, and the amendment might multiply that effect. It would make the task of tackling fraud and error more complex. Moreover, it would not afford any more protection to businesses. I hope that the noble Lord will review the matter and withdraw the amendment.

7.15 p.m.

Lord Higgins: There is no difference between the noble Baroness and myself with regard to the need to combat fraud. The question is simply whether that can be done at minimum cost. I sought to achieve that end in the amendment. The amendment covers both angles; it is neutral about whether the department or local authorities acting through the department should concentrate their efforts in that regard. We shall later discuss relevant amendments on local authorities.

The noble Baroness drew attention to various recent reports on local authorities. Last week, an interesting distinction between Wandsworth and Camden emerged. I make no political point; I merely note the difference between local authorities. We can go into that matter later when we discuss local authorities.

The noble Baroness will know that local authorities are concerned about the fact that the costs of the operation will be borne by local authorities even though the money is that of central government. Again, we shall discuss that in more detail later.

I shall consider the comments of the noble Baroness very carefully. Clearly, one does not want to introduce an extra layer. However, one may be able to achieve economies by concentrating applications. There may be a less close link, if I may put it that way, between the inquiries being made by local authorities and local organisations. I have some concern about confidentiality in that regard.

In view of the reply of the noble Baroness, I shall see what I can do by way of redrafting the amendment to achieve its objective more efficiently. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.


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