Giro cheques should be scrapped, MPs say: Paying benefits into accounts 'would help to combat DSS fraud'

THE BEST way of combating benefit fraud would be to scrap the traditional 'giro' payment system and send the money direct to bank accounts, it was claimed yesterday.

A report from the House of Commons Public Accounts Committee on fighting organised fraud at the Department of Social Security and Benefits Agency, said it was the DSS's view 'that the widespread use of automated credit transfer would be the single most important step to reducing organised fraud substantially'.

MPs said the DSS was considering extending the automatic system used by banks to building societies and post offices. They warned, though, that the phasing-out of the giro could have 'unwelcome effects on those receiving benefits who are often not in a position to cope easily with major changes'.

Other measures being considered were a new design for pension and order books and widely publicised identity cards. So far, however, the DSS had not found a way of making ID cards foolproof.

Despite the plans, the committee criticised the Government for not doing enough to tackle what it described as 'a serious problem'. Fraud costs the benefits system at least pounds 1bn a year. According to the most recent figures available, the DSS's Organised Fraud Branch was looking into cases totalling pounds 61.4m.

More staff should be employed to detect and investigate fraud by criminal gangs. Over the last six years, staff levels had risen from 78 to 250 but they were still too low.

'We are concerned that, in the face of rising losses through organised fraud, and the high cost effectiveness of the staff currently engaged in combating it, staff numbers have increased only marginally and no further increase is expected at present.'

Some of the MPs' harshest words were reserved for the fact that despite the amount of publicity devoted to benefits thefts, the Government had not found the time or the money to give investigators their own fraud computer. The earliest it could be introduced, the DSS had said, would be during 1993-94.

'We urge the department to do their utmost to secure implementation within this timescale, and we will be keeping the matter under review,' the MPs said. It was also 'unacceptable' that until recently staff were given little guidance on how to improve their fraud detection skills.