Serious Crime Bill [HL]

It is likely that a trend in nature of behaviour is identified. Once it is identified, that information will be passed to the relevant authority, which will then look at the matches and the areas that have been so identified and investigate whether further inquiry is necessitated by the information. The Audit Commission will not keep the detailed information after it has used its data sets—it really is setting out the trends: ““Where do we have to look and what have we got to look for?””. We know the success that this process has had by virtue of the amount of fraud which has thereby been identified. This method has proven very successful in assisting the agencies and the authorities which are given responsibility for making the targeted inquiry into areas where they should properly go. It also enables a local authority, for example, identifying a possible pattern of fraud, to change its systems and, in doing so, to make that system more resilient to potential fraud. That is why, as I said earlier, the commission is also looking at areas where there is no longer activity and where matching is not occurring, so that we know that that method of committing fraud has perhaps stopped and that people may have moved on to something else once a gap is filled. The Audit Commission will use its findings to determine which sets of data are most productive in identifying fraud and focus on them, because making sure that we target resources appropriately is an issue. It will also advise the participating bodies where they are getting a lot of matches and therefore need to tighten up their system. The Audit Commission has found that that has been extremely useful to all concerned. The noble Lords, Lord Henley and Lord Burnett, asked about the children’s index. The provision is very unlikely to involve disclosure from the children’s index as it is hard to see how this could assist the fight against fraud, which is the determining factor. However, I am very happy to look into that issue and write to noble Lords as appropriate. As I have made clear, disclosure is authorised to anybody provided that it is legitimately required for the prevention and detection of fraud. This will include the participating bodies and, if appropriate, the police. As we discussed earlier, there is a criminal offence for further wrongful disclosure. Mention was made of patients’ data. Patients’ data are not disclosable beyond the National Health Service. Amendment No. 112 would remove newSection 32C of the Audit Commission Act, which provides for the voluntary provision of data to the Audit Commission for use in the national fraud initiative. It would ensure that the only bodies to participate in the national fraud initiative would be those that are currently within the commission’s audit and inspection regime. This would defeat one of the key objectives of the new legislation, which is to build on existing mechanisms to tackle fraud across the public sector. This would be particularly unfortunate in relation to the national fraud initiative, which, as I hope I have adequately explained, has a demonstrable track record in the fight against fraud. The amendment has implications, not just for the effective prevention and detection of fraud in England, but also for the UK generally, as Scotland, Wales and Northern Ireland may, in due course, wish to provide their data to the Audit Commission under this provision. The amendment would prevent any such benefits being achieved. New Section 32C does not enable bodies to provide data to the commission on a carte blanche basis. Rather, the Audit Commission must first be satisfied that it is in fact appropriate for it to accept this data for the purposes of its data-matching exercises. This in turn will depend on the Audit Commission’s experience of its use in the fight against fraud, suitably informed where necessary by pilot exercises. That is the whole purpose of having the pilots—so that can better be identified. Secondly, no one will be able to provide the commission with patient data on a voluntary basis. These safeguards ensure that only the minimum of relevant data will be included in data-matching exercises. It is important also to consider the practical consequences of removing this section. First, it would mean that the Audit Commission could match benefit data that were administered by local authorities—for example, council tax and housing benefit—but would not be able to match national benefit data that are administered by the Department for Work and Pensions. Such gaps raise the obvious but avoidable risk that fraudsters will slip through the net. Secondly, under this amendment we would also lose the valuable contribution that private sector bodies can make in reducing fraud in the public sector. Early indications suggest that significant numbers of landlords with mortgages from private sector companies are fraudulently claiming housing benefit from local authorities. It would be extremely unfortunate if we missed the opportunity to engage the private sector in helping to strengthen the clasp on the public purse. The noble Lord, Lord Henley, asked whether the commission had a complaints system for those who have wrongfully been investigated. It does—and, in the eight years of running the national fraud initiative, the commission has not had a complaint of wrongful investigation. That gives us some assurance that the commission has worked with propriety and gives strength to the assessment made by the noble Baroness, Lady Anelay, of its competence and probity. The noble Lord, Lord Burnett, raised issues about data mining, which would allow profiling of individuals whose behavioural characteristics were indicative of a propensity to commit fraud in future. I hope that I have reassured him that that is not the intention and that the commission will look only at patterns and trends to identify emergent risks at the overall systems level, not to identify individual propensity to commit fraud in future. Matches disclosed relating to individuals disclose only current analysis indicative of current fraud. I know that the noble Lord would think that was a good as opposed to a bad thing, and I can reasonably anticipate that the noble Lords, Lord Henley and Lord Hylton, and the noble Baroness, Lady Anelay, would concur with that. Of course, I hear what the noble Lord, Lord Hylton, says about the concerns that have been expressed. He sought reassurance, and I hope that I have explained how the system works and that the commission matches the issues in ways that are appropriate. To address welfare fraud against local authorities is important, and these provisions would allow national welfare fraud to be identified, as well as tax fraud, provided that the relevant government departments volunteered the information. They are not obliged to use this; it is a facility that would be available to all, which we think has real merit. I have done what the noble Lord, Lord Henley, asked me to do; namely, to take these issues very seriously and try to answer as fully as I can in the hope that we shall not have to return to them.