Analysis of written responses to the consultation on social security in Scotland

18. Fraud

Scottish Government counter-fraud strategy

18.1 The Scottish Government set out its proposals for the counter-fraud strategy in Part 3 of the consultation document.

Question - Should the existing Scottish Government approach to fraud be adopted for use in our social security system? If no, what else should be used instead?

Table 18.1 Should the existing Scottish Government approach to fraud be adopted for use in our social security system?
	Yes		No
Respondent group	Number	%	Number	%	Total
Individuals	53	91%	5	9%	58
Organisations	33	63%	19	37%	52
All respondents answering	86	78%	24	22%	110

Note: A full breakdown of responses by respondent group is included in Annex 2 (available to download separately as part of this publication).

18.2 A total of 110 respondents answered the closed part of the question. Most respondents (78%) agreed that the existing Scottish Government approach to fraud should be adopted for use in the Scottish social security system. However, a substantial minority (22%) disagreed. Individuals were more likely to support the use of the existing approach than organisations. There was overall support from the main respondent groups to the question. Disagreement came mainly from a few local authority respondents and a few advice and support organisations.

18.3 When asked what else should be used instead 50 respondents provided further comments (36 organisations and 14 individuals). As the question clearly asked only those answering 'no' for suggestions, most of the comments came from those who wanted a different approach, although there were also comments from respondents who answered 'yes'.

Suggestions from those answering 'no'

18.4 The reasons for saying that the approach should not be adopted for use in the social security system were very varied. Respondents made various suggestions for improved approaches.

• A few respondents felt that there should be specific legislation, a dedicated social security fraud service, and a specific code of practice, to tailor the fraud approach to social security.
• A few respondents felt that there should be a stronger focus on early intervention, to prevent fraud and ensure it was less possible in the new system.
• Some respondents felt that social security fraud was misrepresented, and that it was important to focus on entitlement, presume innocence and embed the principles of dignity and respect.
• A few, particularly local authority respondents, emphasised the importance of more consideration around joining up local, national and UK level activity around fraud, and learning from one another.
• A few individuals felt that the approach needed to be harsher or stricter.

"Avoiding fraud should not be at the expense of ensuring a fair and accessible system."
Parenting across Scotland

Other comments

18.5 A number of respondents who said 'yes' or didn't provide a closed answer provided further comments. These respondents largely welcomed the distinction between overpayments and fraud, and emphasised that it was important that there was no assumption of guilt, recognition that people could be confused, proportionate responses to fraud, and recognition that even if people commit fraud it is important to be empathetic and understand the reasons for this.

Question - If yes, should our existing counter-fraud strategy be adapted in any way? Please explain your answer.

Table 18.2 If yes, should our existing counter-fraud strategy be adapted in any way?
	Yes		No
Respondent group	Number	%	Number	%	Total
Individuals	25	60%	17	40%	42
Organisations	17	53%	15	47%	32
All respondents answering	42	57%	32	43%	74

Note: A full breakdown of responses by respondent group is included in Annex 2 (available to download separately as part of this publication).

18.6 In total, 74 respondents answered the closed part of this question. Views on the issue were fairly mixed. Over half (57%) felt that the existing strategy should be adapted. A substantial minority (43%) disagreed. Disagreement came mainly from a few local authority respondents (who were split on the issue, overall) and a few housing and homelessness organisations.

18.7 Further explanation was provided by 56 respondents (26 organisations and 30 individuals), most of whom agreed that the existing counter-fraud strategy should be adapted.

Reasons for answering 'yes'

18.8 The main reason for suggesting an adaptation to the existing counter-fraud strategy was to soften the 'zero tolerance' approach, which these respondents felt was unduly harsh, created a hostile environment and fostered suspicion.

18.9 Instead, these respondents felt there was a need for a proportionate response, which focused on an ethos of entitlement, and understanding and raising awareness of the low levels of benefit fraud. A few organisations highlighted the importance of understanding how a range of equality issues may affect benefit fraud, including:

• gender may be an important aspect of some benefit fraud, due to aspects of coercive control and domestic abuse;
• impairments could lead to difficulties communicating and understanding the system; and
• racial prejudice may affect accusations of benefit fraud.

18.10 Overall, these respondents were keen that the tone and emphasis of the strategy be adapted to ensure that there was an ethos of compassion, dignity and respect. In particular, Citizens Advice Scotland recommended that cases of fraud and errors were reported on separately, to provide a more accurate picture and help with tracking and understanding fraud.

Reasons for answering 'no'

18.11 The small number of respondents who answered 'no' to the closed part of this question, but offered comments, generally felt that the strategy works fine as it is.

18.12 A few local authority respondents felt that a zero tolerance approach was very important.

"In the interests of protecting the public purse there should be zero tolerance towards fraud. There is an opportunity to embed an anti-fraud culture in the design of the devolved benefits."
Glasgow City Council

18.13 While one respondent wanted to see reports by the public made easier, two cautioned against using public reports - for reasons of equality and transparency. A few felt that the system should be as simple as possible.

Question - How could the new Scottish social security system 'design out' errors and reduce the potential for fraud at the application stage?

18.14 In total, 89 respondents answered this question (51 organisations and 38 individuals).

18.15 A large number of respondents said that errors could be 'designed out' and the potential for fraud could be reduced through more verification of identities and circumstances, and more cross checking of data at the point of application.

18.16 The main suggestions were:

• ensuring information is correct at the outset and reviewing this regularly;
• asking for accompanying evidence like birth certificates;
• working with local staff to gather local knowledge;
• connecting relevant databases - including the new social security agency, DWP, local authorities, HMRC and NHS - ideally in real time;
• introducing a single claim reference number so that all information can be seen at once;
• using related questions in the application stage so that responses can be checked for logic and accuracy; and
• training for staff on gathering and using this information.

18.17 Some felt that designing a simple system, accompanied by advice and information, would reduce the potential for errors. These respondents felt that the system needed to be clear, understandable and consistent - reducing the current complexity - with simple and easy to complete forms. Respondents also highlighted the importance of advice and support, and information about on-going responsibilities and duties (in friendly terms).

"Claimants also need to be provided with clear, accessible information about the conditions of benefit entitlement and their on-going responsibility to notify the social security agency of changes in their impairment or condition. These responsibilities should be explained to them in an open, non-threatening way both when they apply and after they are awarded benefits."
Inclusion Scotland

18.18 Some highlighted that it was important to better understand the reasons for both fraud and errors, and to tackle these issues separately. A few were concerned that this question brought together fraud and errors, and felt that it was very important that these topics were considered separately.

"The system should begin from the premise that most people are not fraudsters. The costs of social security fraud are insignificant compared to that associated with tax management which is considered legal and admirable."
Individual

"Any action should be proportionate, evidence-based and reflect the spirit of the legislation. The approach used should not risk unintended consequences for citizens' health - undermining any fresh start taken in the rest of the system."
Directors of Public Health NHS Boards Scotland

" CRER stresses that all fraud investigations must be based on solid evidence, not assumptions, prejudice, and discriminatory attitudes. Claimants should be treated as innocent until proven guilty and must be given a fair opportunity to explain any discrepancies or changes."
Coalition for Racial Equality and Rights

Investigations

18.19 The Scottish Government set out its proposals for investigations in Part 3 of the consultation document.

Question - Should the Scottish social security system adopt DWP's existing code of practice for investigators? Please explain your answer.

Table 18.3 Should the Scottish social security system adopt DWP's existing code of practice for investigators?
	Yes		No
Respondent group	Number	%	Number	%	Total
Individuals	35	66%	18	34%	53
Organisations	28	65%	15	35%	43
All respondents answering	63	66%	33	34%	96

Note: A full breakdown of responses by respondent group is included in Annex 2 (available to download separately as part of this publication).

18.20 In total, 96 respondents answered the closed part of this question. Two-thirds (66%) of those responding felt that the Scottish social security system should adopt DWP's existing code of practice for investigators. Just over a third (34%) disagreed.

18.21 Further explanation was provided by 65 respondents (36 organisations and 29 individuals).

Reasons for answering 'yes'

18.22 Some felt that the DWP's code should be adopted because it existed, was understood and worked. A few felt that it was important that the approaches were the same or similar as there may be cross border issues. A few organisations felt that the DWP's code was more appropriate than the approach used in Scotland currently, as it provided greater protection to all parties and clearly defined the powers available to investigators. A few highlighted that the code may need slight modification to fit the Scottish context.

"The Scottish social security system should adopt the DWP's current code of practice. The DWP's code or practice, is based on PACE (the Police and Criminal Evidence Act 1984), which provides greater protection to claimants and investigators and clearly defines the range of powers available to investigators."
Inclusion Scotland

Reasons for answering 'no'

18.23 However, some indicated that there should be a Scottish specific code - without giving further details. Some provided suggestions including:

• ensuring the system is based on trust, dignity and respect - and designing a code and using powers with these principles in mind;
• providing training for investigators - in investigation, data protection, human rights, interview skills, and sharing these skills across the country;
• limiting the power of investigators - for example, limiting their power to obtain information from third parties or to enter premises without permission from the occupier;
• limiting situations where individuals are interviewed under caution - and where this is used ensuring that people are encouraged to have a representative present;
• removing anonymous reporting; and
• not basing investigations on 'showing sign of pain' as disability and pain can be invisible.

"I don't wear my pain all over my face, I just have it inside my body, hurting. I don't want someone to be able to take a photo of me doing an activity and claim I did it without pain just because they cannot see pain."
Individual

"Because you are made to feel like a criminal and this can be very stressful the claimant should be able to have someone with them."
Individual

Wider issue

18.24 One respondent, the Public and Commercial Services Union, made a particular point that it was important for the Scottish Government to think carefully about the grade of investigators, working jointly with the PCSU, in order to establish a well-motivated and high performing team of fraud staff. It also suggested removing targets for prosecution and monetary recovery levels.

" PCS believe that the Scottish Government should be mindful of the grading concerns raised by our union as a result of merging local government and DWP fraud teams into the 'single fraud investigation service' SFIS. The union believes the staff are currently assigned to a lower graded role for the complexity of the investigatory role they have and taking into account the additional powers they have in comparison to staff of the same grade in other areas of DWP."
Public and Commercial Services ( PCS) Union

Question - What are your views on the existing range of powers granted to investigators?

18.25 In total, 67 respondents answered this question (33 organisations and 34 individuals). Some thought that the existing range of powers were fine, some felt they required further development and some felt they were too wide.

Powers require further development

18.26 Those who felt the powers required further development were largely local authority respondents, and a few individuals. The main reasons were:

• the need to align powers with section 112 of the Social Security Administration Act 1992;
• the need for enhanced powers for some officers (in senior positions) to require financial institutions (and others) to provide financial and utility information (subject to robust controls);
• the need for further powers to identify council tax reduction and single person fraud; and
• the need for information sharing and co-ordination around investigations with DWP.

Powers too wide

18.27 Those who felt the powers were too great were mainly individuals. There was particular concern from a few respondents about the power to enter and the power of surveillance. A few indicated that these powers should be used only as a last resort. A few individuals felt the powers were frightening, unfair, draconian, stressful and open to abuse.

18.28 Some respondents emphasised that it was important to carefully consider how the powers were used - in a way which respected individuals' right to privacy, sat within a human rights framework and protected respect and dignity. A few re-emphasised the need to assume innocence, and felt that the powers must be used correctly and not in a heavy-handed manner.

"If used correctly, and not heavy handedly, they would work reasonably well. The key is the heavy handedness."
Individual

Question - What are your views on conducting interviews under caution?

18.29 In total, 74 respondents answered this question (37 organisations and 37 individuals).

Importance of interviews under caution

18.30 Many felt that interviews under caution were important and should continue to be used. These respondents felt that interviews under caution:

• ensured that all parties were clear about the purpose of the conversation;
• ensured individuals were aware of their legal rights - and not to do so may breach the human right to a fair trial;
• provided essential protection to individuals through consolidating the process and defining limits;
• were vital to investigate fraud and seek prosecution of offenders; and
• sent a clear message about the severity of the situation.

18.31 However, many of these respondents also recognised that interviews under caution could be stressful and that measures to reduce the stress caused by the situation should be put in place - including consultation on how to design a good process, and training for those undertaking interviews.

Conducting interviews under caution

18.32 Many respondents emphasised the importance of the presence of third parties. This included legal representation, an independent advocate, a support worker, an independent observer or another appropriate adult. Many talked about the importance of free legal support. A few felt that a police officer should be present or should lead the interview. Some talked specifically about the need for support for vulnerable people or people with additional support needs, including people with learning disabilities, mental health needs or experiencing domestic abuse (which may not be immediately apparent to the interviewers).

18.33 Some felt that it was important that individuals were fully informed about the issues being explored and the seriousness of the situation. This would include informing individuals about their legal rights, the purpose of the interview, the seriousness of the situation and the fact it could be used as evidence in a criminal action. A few emphasised the importance of vulnerable people receiving support to understand the situation, if required. A few also felt that it was important to offer plenty advance notice so that people could prepare for the interview.

18.34 Some emphasised the importance of retaining the dignity of individuals, and using interviews under caution in a proportionate, flexible and sensitive manner - safeguarding the rights of vulnerable people.

18.35 A few offered views on recording interviews, suggesting that the recordings needed to be good quality, and should be both video and audio recorded. A few also felt that the individual should be provided with a copy of the tape.

18.36 A few felt that interviews under caution should not be used.

Question - What improvements could be made around conducting interviews under caution?

18.37 There were 59 responses to this question (33 organisations and 26 individuals). Respondents largely reiterated their response to the previous question, or referred to their previous answer.

18.38 The main themes emerging were:

• the need to respect the dignity of the individual, with a culture of trust and respect and presumption of innocence;
• the need to make people aware of their right to a third party being present, including legal representation, advice or another appropriate adult;
• the need to support vulnerable individuals to understand the process;
• the need to provide clear information and help people understand the nature of the offence;
• the need for training for interviewers;
• the need for better quality recording or transcripts (avoiding slang and hesitations which can be out of context) and providing these to individuals; and
• the need for interviews to be held in a neutral venue.

Penalties

18.39 The Scottish Government set out its proposals for penalties in Part 3 of the consultation document.

Question - Should the Scottish Government retain the same list of offences which people can be found guilty of in terms of social security fraud? Please explain your answer.

Table 18.4 Should the Scottish Government retain the same list of offences which people can be found guilty of in terms of social security fraud?
	Yes		No
Respondent group	Number	%	Number	%	Total
Individuals	40	77%	12	23%	52
Organisations	26	70%	11	30%	37
All respondents answering	66	74%	23	26%	89

Note: A full breakdown of responses by respondent group is included in Annex 2 (available to download separately as part of this publication).

18.40 In total, 89 respondents answered the closed part of this question. Most (74%) respondents felt that the Scottish Government should retain the same list of offences which people can be found guilty of in terms of social security fraud. A substantial minority (26%) of respondents disagreed.

18.41 Further explanation was provided by 62 respondents (32 organisations and 30 individuals). Some explained that they felt the list should be retained, as it appeared clear and comprehensive. A few emphasised the need to keep the list under review. Often, the same points were made by both those who agreed and disagreed.

Clearer definition of the offences

18.42 Some (both those who answered 'yes' and 'no') felt that some of the offences needed to be more clearly worded to ensure that ambiguity is reduced - and deliberate fraud could be more easily identified. This was a particular issue around the offence of failure to notify a change in a person's circumstance. Respondents pointed to the need for a high level of proof for 'intent' in this instance, and a clear differentiation between fraud and error. Some felt it was important to recognise emotionally charged situations and other mitigating circumstances, and be clear that offences only exist where there is a clear intent to gain benefit to which individuals would not otherwise be entitled to.

"We would advocate for a much more holistic approach to fraud offences, many attempts to de-fraud the system are likely to be a result of need and potential desperation as oppose to conscious defrauding. In a climate where poverty exists to such a degree we believe that attempts to understand the circumstances of the individual are made."
Glasgow Council for the Voluntary Sector

Concerns about the offences

18.43 A few respondents, who answered both 'yes' and 'no', expressed particular concern about the offence relating to failure to notify a change in a person's circumstances when the person is aware that the change affects another person's entitlement.

"The offence of "Failing to notify a change in a person's circumstances, when the person is aware that the change affects another person's entitlement" is particularly problematic and causes particular concern for advisers and representatives. While case law is clear that an adviser will not commit such an offence as long as they have made a claimant fully aware of their duties and do not contribute to any failure, it remains an area of concern and worry for advisors."
CPAG Scotland

Adding new offences

18.44 A few, mainly of those who felt the list should be retained, felt that new offences should be added:

• the offence of a third party being complicit in fraud;
• fraud against the Scottish Welfare Fund, school meals, clothing grants and payments made to carers;
• deliberate falsification of evidence; and
• omission of declaration to obtain benefit.

Penalties and punishments for offences

18.45 A few of those who felt the list should not be retained discussed the penalties and punishments for offences. There were varying views. A few felt that it was not appropriate to use prison as a punishment for financial crimes - and that paying the money back was a more appropriate penalty. However, a few were concerned that this would put people further into poverty, and felt that community service would be more appropriate. A few felt that penalties should only be used where it was clear that the individual had deliberately committed fraud. One respondent emphasised that it was important to consider the desperate circumstances that pushed people to commit fraud, and to consider support and intervention in these cases.

" CAS recommends that civil penalties should be used only where it is unambiguous that the individual deliberately provided incorrect information to the agency or deliberately withheld information."
Citizens Advice Scotland

18.46 A few felt that the focus should not be on identifying and penalising benefit fraud, highlighting that other fraud was more prevalent, and that it was unfair to penalise people when they were trying hard to find work.

Question - Should the Scottish Government impose the same level of penalties for social security fraud as are currently imposed? Please explain your answer.

Table 18.5 Should the Scottish Government impose the same level of penalties for social security fraud as are currently imposed?
	Yes		No
Respondent group	Number	%	Number	%	Total
Individuals	28	58%	20	42%	48
Organisations	21	62%	13	38%	34
All respondents answering	49	60%	33	40%	82

Note: A full breakdown of responses by respondent group is included in Annex 2 (available to download separately as part of this publication).

18.47 In total, 82 respondents answered this question. Most respondents (60%) felt that the Scottish Government should impose the same level of penalties for social security fraud as are currently imposed. However, a substantial minority (40%) disagreed.

18.48 Further comments were provided by 61 respondents (30 organisations and 31 individuals). Often, the same points were made by both those who agreed and disagreed.

Reasons for supporting the same level of penalties

18.49 The largest proportion of those who provided an explanation felt that the current penalties were appropriate, and meant that there would be consistency between Scotland and the UK. These respondents felt that consistency across the UK was important, particularly if there were multiple offences; that there was no clear reason to change the penalties in Scotland; and that having lower penalties in Scotland may send the wrong message. However, Child Poverty Action Group felt that fraud in the Scottish benefit system should not result in sanctions on UK benefits, to reduce complexity.

"We recommend that in the interests of reducing complexity that benefit sanctions do not apply to Scottish benefits and that the Scottish Government does not seek to have sanctions imposed on UK benefits following a benefit offence relating to a Scottish benefit."
CPAG Scotland

Areas of concern for those agreeing and disagreeing

18.50 Some respondents (including those who answered 'yes' and 'no') expressed concern about very high penalties applied through the use of 'administrative penalties'. Some recommended that these were either reduced or removed. Some respondents felt that re-payment should be adequate, and that fines were not appropriate as they could be disproportionate to the offence and could push people further into poverty.

" DWP introduced a scheme called Administrative Penalties. This did and does not work. Trying to take extra money from people who already have an overpayment only adds to their debt and decreases the likelihood of being fully recovered."
Individual

"…we would ask the Scottish Government to consider whether administrative penalties should be retained under a new system based on principles of dignity, respect and fairness. We would rather see the Scottish Government concentrating its efforts and resources on prosecuting cases which can be proven in court instead."
Inclusion Scotland

"There should be a proportionate response to overpayments. Where these are minor and the administrative cost of recovery is significantly greater than the sum to be recovered, the overpayment should be written off. Where the overpayment is more substantial, in accordance with the principle that people should be treated with dignity and respect, a repayment should be negotiated according to the claimant's individual circumstances."
Homeless Action Scotland

18.51 There was also some concern, from those answering both 'yes' and 'no', that administrative penalties and / or civil penalties were used without fraud being proven, and that these penalties may not be in line with human rights obligations.

18.52 A few respondents emphasised the need to be proportionate in the use of penalties. These respondents favoured repayment without further penalty unless fraud was large scale and had clear evidence of intent. Respondents highlighted that the penalty should fit individual circumstances, based on a full understanding of the case, and that the use of penalties should be monitored to explore impact in terms of equality. A few suggested that a broader range of remedies should be available, on both a voluntary or compulsory basis. A few felt that prison was not appropriate for these offences, and was a costly way of dealing with fraud.

Other reasons for disagreeing

18.53 A few individuals, disability organisations and local authority respondents who mostly disagreed, felt that penalties should be harsher.

"While the current level of penalties that can be imposed for social security fraud include removing an individual's liberty and provide a degree of deterrent, the scale of abuse in the current social security system is significant. This demonstrates that, for a small minority, the current level of penalties is not a deterrent and therefore needs to be strengthened for the most serious cases of intentional and organised crime."
Highland Council