Welfare Reform – Modernising the Welfare State

The Benefit Fraud Inspectorate is an integral part of DSS Ministers’ modernisation plans for the welfare state. Over the last twelve months, we have been establishing our role in helping to secure the system. We have more to do, and we will be taking our mandate from the government’s recently published Welfare Reform and Fraud Green Papers; and in this context we will be focusing our efforts on:

• inspecting, in particular, the performance of the gateways to benefits;
• ensuring administrators balance their counter-fraud efforts across the government’s three-pronged campaign of better detection, improved deterrence and prevention;
• encouraging closer working between all of those with a stake or interest in stopping fraud – government, academia and private sector; and
• improving the sharing of good practice between administrators.

Performance of the Gateways

We already report on the security of the gateways to benefits through our inspection programme. Our plans for 1998/99 will see us starting about 40 inspections by the end of the year, a substantial increase in the pace of inspections (our current work programme is set out at appendix 2). Over the coming year we will extend the scope of our activity to inspect:

• the security of issuing National Insurance numbers and management of the National Insurance accounts of every citizen in the UK; and
• the role of the Child Support Agency and Contributions Agency in the DSS counter-fraud strategy.

Counter-fraud Strategies

Ministers want to modernise Social Security, and in the context of fraud this means an increased focus on prevention and deterrence, with improved IT systems and processes. Fraudsters will still try to attack the system, however, and DSS agencies and local authorities will need to continue their efforts to detect fraud and use sanctions against those caught. We will work with professionals in other fraud disciplines to ensure that:

• the standards of fraud investigation and performance of fraud investigators are high;
• administrators are using the sanctions that are available to them in dealing with fraudsters; and
• that information is being properly shared to increase the effectiveness of counter-fraud efforts.

Working with Audit

The Inspectorate will continue to work closely with audit bodies both internal and external to:

• maximise our contribution to the day-to-day performance of administrators;
• minimise the disruption our activities might cause to their day-to-day business; and
• ensure that we adopt a spirit of helping administrators and adding value to their operations.

Spreading Good Practice

There is much of which administrators and counter-fraud practitioners can be proud. We have seen many examples of good practice during our inspections, and through our contacts with other organisations and watchdogs. For the administrator, who already receives a wealth of guidance from the DSS and other organisations, it can be a daunting task determining the right action to take. Over the following year we intend:

• to encourage those with good practices to make greater use of technology to share them;
• to encourage services which allow administrators to ‘go on-line’ to get a balanced view on current practices and advice through convenient, user-friendly IT systems; and
• to consider a BFI role in endorsing the good practices we discover through our inspection programme.

And finally…

DSS Ministers have set out a vision for a new Welfare State. The BFI is a part of that vision and is here to make a difference – to drive up standards of administration and counter-fraud performance in social security. We believe we have achieved a good deal since our launch in November 1997. But there is more to be done. We believe that we will achieve more in 1998/99, through our established inspection programmes and through new work in other areas. We will ensure that our work is underpinned by three basic principles – recurrent themes of this report:

• partnership;
• objectivity; and
• added value.

1997/98 has been a challenging year. We expect 1998/99 to be no different as we continue to develop as an organisation and enhance the role we play.