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Lord Higgins moved Amendment No. 52:

("Quarterly reports
Quarterly report by authority

."(1) Each authority administering housing benefit or council tax benefit shall prepare a quarterly report in respect of--
(a) the number of investigations aborted during the period of the report;
(b) the number of investigations under way during the period of the report; and
(c) the number of penalties, prosecutions and their outcomes during the period of the report,
as a result of the powers conferred on it by this Act.
(2) Each authority shall make the reports referred to in subsection (1) available to the public at large in a manner it thinks fit.").

The noble Lord said: My Lords, this amendment, unlike the following one, which is concerned with other benefits, relates particularly to housing benefit and council tax benefit.

I note that detected fraud in local government exceeded 100 million for the first time in 1998-99, and that detected fraud increased by 22 per cent in the same period. Of course, one never knows whether the increase in detected fraud reflects the fact that there is more fraud or the fact that more is detected.

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The purpose of the amendment is simple. Concern has been expressed throughout our debates on the Bill regarding the extent to which the proposals will be operated in a reasonable manner. Concerns remain that there is no external check on that. The amendment seeks to make available an indication of the extent to which the operation of the proposals has turned out to be reasonable.

The crucial item out of the three listed in the amendment is the number of investigations aborted. Clearly, if an enormous percentage of investigations undertaken turn out to be abortive, there is some implication that the reasonableness of the inquiries being started in the first place is in doubt. It would be helpful for us to see how, when the Bill becomes an Act, as I hope and believe it will, it operates in practice. I beg to move.

7.45 p.m.

Baroness Hollis of Heigham: My Lords, the amendment seeks to place a statutory duty on each local authority to publish a quarterly report on the numbers of investigations it carries out on the basis of the powers in the Bill, and the proportion of those which are aborted and those which result in some form of punishment.

I take the noble Lord's point that this information would provide a form of public accountability on how well local authorities were making use of the powers, and whether they were using them properly. However, I hope to persuade the noble Lord that the amendment is unnecessary.

I should first point out that he is in error in his assumption that these data would provide a meaningful picture. Local authorities do not "abort" investigations. In line with the Criminal Procedure and Investigations Act 1996, they carry them through to conclusion, even where the indications are that the investigation is leading to a negative outcome. In that process we would expect there to be a proportion of cases where investigation established that there was no fraud. We would also expect a proportion of cases--though hopefully diminishing with the use of powers in the Bill--where there was insufficient evidence to prove fraud. That is the nature of investigation. Obviously, if we limited ourselves to investigating only those cases where fraud was pretty much a foregone conclusion, we should not make much of a dent in the levels of fraud that we know exist.

We share the understanding that it is very hard to know what counts as success. If a local authority identifies a large amount of fraud, is it because it has let in a large amount earlier in the system which it subsequently detects? If an authority detects a low level of fraud, is it because it has "built out" fraud at early stages? There is no way of knowing from the noble Lord's amendment. Therefore, there is no means of identifying whether a local authority is performing to "best value" standards by nature of the amendment, because we do not know what would count as success or failure. I suggest that that is why, at its core, the

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amendment is not appropriate. We simply cannot use the number of prosecutions or penalties compared with the number of investigations to indicate either success or failure in terms of the Bill.

It is also the case that investigators may use any of the full range of powers at their disposal in any one case. While it would obviously be possible to distinguish cases where the new powers were used from those where they were not, it would be hard to draw meaningful conclusions about the effectiveness of the particular powers in which the noble Lord is interested and the powers that already exist-- many of them introduced by the previous administration--and which were being used in addition.

A further point of substance is that we already collect a great deal of information about local authorities' anti-fraud performance for management purposes, which might be a more proper use of such statistics. More generally, I believe that adherence to the code of practice and the commitment on the face of the Bill agreed by your Lordships this evening will ensure that we use the powers properly.

We cannot know whether detecting more fraud or detecting less fraud is a priori evidence that the Bill is satisfactory or not as regards local authorities--because that must be balanced against the amount of fraud that we have built out of the system by other parts of our relationship to local authorities in the handling of housing benefit. It therefore seems to me that what we should rightly be focusing on is whether local authorities observe the code of practice. As we discussed earlier, the paragraphs affecting local authorities will come as a result of consultation with them over the next few weeks. We should also focus on a review of that in the light of complaints that we may receive about the effectiveness of local authorities' performance and the appropriateness of the behaviour of their officials.

We have already given your Lordships a commitment that we shall be reviewing the code within three years to ensure that both we and our information providers are happy with the operation of the powers in practice. We plan to do this by means of a report for consultation, which will cover our performance and that of local authorities against the requirements of the code. Plainly this will include information on how we and local authorities have used the powers and how productive they have been compared with expectations. The report will be widely valued and publicly available.

Local authorities are subject to a best value performance indicator on security and accuracy. Reports of performance under best value are already made available to the public. We intend to review that performance indicator to make it more robust. We expect to link it to the new anti-fraud incentive scheme for local authorities that will be phased in from April 2001.

For all those arguments, we cannot meet the noble Lord's request; namely, to determine whether more or fewer prosecutions, more or fewer abortive prosecutions, are an indicator of success or failure.

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However, we can get to the substantive point and reward local authorities for detecting fraud and for building fraud out of their system, as well as reviewing the conduct of their officials in how they handle fraud in the light of complaints or any concern and embody that in the code of practice and its reviews over the next three years. In the light of my explanation, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Higgins: My Lords, I entirely take the point that if there is an increase in the detection of fraud one is not sure whether that means there is more fraud or more detection. Indeed, I made that point in my opening remarks. I was well aware of the problem when I was Minister with responsibility for Customs & Excise as regards the detection of drugs: one never knew whether it was more drugs coming in or more detection of drugs taking place. The only observation to be made in that context is what is happening to the street price. Unfortunately, there is no corresponding indicator in that respect that one could use as far as concerns the matters now under discussion.

I am seeking to establish to what extent certain enquiries were started which, in the event, ought not to have been instigated. It is possible that the noble Baroness is right in her contention that this is not the ideal way to set about the task. However, the very broad-brush approach that the Minister suggests in terms of a code of conduct, and so on, is perhaps not sufficiently precise an indication of the extent to which those operating the system are, or are not, acting reasonably in initiating particular enquiries. I should like further to consider the matter between now and Third Reading. Clearly it would not be appropriate at this stage to move Amendment No. 53, which adopts the same arguments. Indeed, it would merely delay our proceedings. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendment No. 53 not moved.]

Clause 19 [Commencement]:

Baroness Hollis of Heigham moved Amendment No. 54:

    Page 21, line 25, leave out from ("as") to end of line 26 and insert ("the Secretary of State may by order made by statutory instrument appoint.

(2) Subject to subsection (3), different days may be appointed under this section for different purposes.
(3) The power under this section to appoint a day for the coming into force of the provisions of sections 1 and 2 shall not authorise the appointment for those purposes of any day before the issue of the code of practice that must be issued under section (Code of practice about use of information powers).").

On Question, amendment agreed to.

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