EIGHTH REPORT .sx The Committee of Public Accounts has agreed to the following Report .sx THE ELDERLY :sx INFORMATION REQUIREMENTS FOR SUPPORTING THE ELDERLY AND IMPLICATIONS OF PERSONAL PENSIONS FOR THE NATIONAL INSURANCE FUND .sx INTRODUCTION .sx 1 .sx There are some ten and a half million people over pension age in Great Britain .sx Financial support provided by the Department of Social Security for elderly people cost about pounds26 billion in 1989-90 .sx In the same year , the cost to the National Insurance Fund of rebates and incentives for employees opting out of the state earnings related pension scheme and taking out personal pensions instead was about pounds2 billion .sx 2 .sx On the basis of a Report by the Comptroller and Auditor General ( C&AG ) , we examined the Department of Social Security on the adequacy of their information base on the elderly and on their role in the introduction , monitoring and evaluation of the rebate and incentives provided for personal pensions .sx We have considered the evidence given and our main conclusions and recommendations are as follows :sx On the Department's information needs about elderly people .sx ( i ) We note the Department's concern to develop and improve their data base .sx We endorse the areas for improvement set out in the C&AG's Report , and the criteria he has suggested ( paragraph 9) .sx ( ii ) We believe that the Department would be right to attach a high priority to implementing an appropriately designed income survey without further delay ( paragraph 10) .sx ( iii ) We recommend that , in the light of the outcome of their current study , the Department should examine what further surveys may be needed to enable them to estimate the extent to which elderly people leaving residential or institutional care are being assisted by the Social Fund to live in the community ( paragraph 11) .sx ( iv ) We are glad to note that , through their new computer systems , the Department are seeking improvements to their data base on existing beneficiaries ( paragraph 12) .sx On the information needs of elderly people about financial support available .sx ( v ) We recommend that the Department should give further attention to tailoring publicity about benefits , and other forms of financial assistance funded by the Department , to the particular information needs of elderly people ( paragraph 16) .sx ( vi ) We welcome the efforts the Department are making to improve the publicity given to the Social Fund .sx The limited publicity so far provided by the Department about the Independent Living Fund is , however , unsatisfactory in our view and we recommend that , as a minimum step , information about the Fund should be given to all recipients of Attendance Allowance eligible to apply to the Fund for assistance ( paragraph 17) .sx On the Department's appraisal of the likely take up of personal pensions .sx ( vii ) We are glad to note that the Department entirely accept the scope of the Comptroller and Auditor General's study and we also accept their apology for not raising their reservation about the actuarial calculations when agreeing to the draft report ( paragraph 27) .sx ( viii ) We are concerned that , in taking as their main working assumption the lowest figure in the Government Actuary's illustrative range , the Department focused on their own staffing needs , rather than on the potentially much more significant implications for the National Insurance Fund .sx In such circumstances , in our view , estimates need to be made which take account of the possible financial implications on a range of assumptions ( paragraph 28) .sx On the Department's monitoring and evaluation of the take up of personal pensions .sx ( ix ) We note that as a result of the higher than expected cost of the rebate and incentive , and other costs , expenditure on certain non-contributory benefits has been transferred to the Consolidated Fund .sx The effect was that for 1989-90 expenditure of pounds1,806 million which would otherwise have been borne by the National Insurance Fund was covered by general taxation , equivalent to about 1.5p on the basic rate of income tax ( paragraph 33) .sx ( x ) We welcome the fact that the Department are commissioning research into people's attitudes to personal pensions and that they are asking the government Actuary to advise on the long- and short-term implications of personal pensions for the National Insurance Fund ( paragraph 34) .sx ( xi ) We recommend that the Department should re-appraise and update such calculations at frequent intervals , to monitor the current and projected cost , and the expected long-term savings to the state pension scheme , and likely consequences of these for the National Insurance Fund and the taxpayer ( paragraph 34) .sx THE DEPARTMENT'S INFORMATION NEEDS ABOUT ELDERLY PEOPLE .sx 3 .sx To assess whether the financial support they provide for elderly people is effective , and to evaluate the extent to which legislation is meeting policy objectives , the Department seek to obtain adequate information about the expenditure , living standards and financial circumstances of the elderly people concerned .sx 4 .sx The Department have taken several initiatives in recent years to improve their information about elderly people , but they recognise that a number of problems remain .sx They had difficulty in estimating the number of elderly people likely to benefit from three new measures of support , namely improved Income Support Pensioner premiums , the Social Fund , and the Independent Living Fund .sx To date , they have only limited information about the impact of these measures on elderly people .sx And they have difficulty in estimating the number of elderly people eligible for Attendance Allowance .sx 5 .sx The Department told us that their data base was very large and comprehensive and that they were probably better placed than many other social security schemes in this respect because theirs is a large , directly administered system .sx They are working to improve their surveys and hoping to replace their data on claimants , which are currently derived from manual counts in local offices , with better information held on computers .sx The Department are seeking , through their new computer systems , to obtain information on the movement of people on and off benefits , and to link information about individuals receiving various benefits through their National Insurance number .sx 6 .sx The Department told us that it would be unrealistic , as well as enormously expensive , to try to build up a data base which would answer every sort of question about every sort of group quickly and before new policies were introduced .sx 7 .sx In view of the limitations in the Family Income Survey as an information source for Social Security purposes , we asked the Department why they were not supplementing the general information available from the Family Expenditure Survey with a national income survey geared to their specific information needs .sx The Department told us that they were working hard to make a case for such a survey , which is estimated to cost some pounds2 .sx 9 million a year to run .sx 8 .sx We also asked the Department why their local offices did not record the number of elderly people , among others , helped by the Social Fund on leaving residential or institutional care to live in the community .sx The Department told us that this was not a priority , given the pressures on their local offices , but that they had set up a study of the number of people leaving residential care who might have need for Social Fund community care grants .sx Conclusions 9 .sx We note the Department's concern to develop and improve their data base .sx We recognise that they face a difficult task in addressing some of the limitations in their current information about elderly people .sx But it is important for these shortcomings to be tackled so that the Department can be as clear as possible about what they are trying to achieve through benefit expenditure and how successful they are in meeting theses objectives .sx We endorse the areas for improvement set out in the C&AG's Report , and his opinion that an adequate information base should include sufficient , reliable and timely data .sx In our view , these criteria are perfectly reasonable and do not amount to the pursuit of unrealistically comprehensive data , which we are not recommending .sx 10 .sx We believe that the cost of an incomes survey geared to the Department's specific information needs has to be seen in the context of expenditure of pounds26 billion for the elderly alone .sx We believe that the Department would be right to attach a high priority to implementing an appropriately designed incomes survey without further delay .sx 11 .sx We believe that the Department should be in a position to estimate the extent to which elderly people leaving residential or institutional care are being assisted by the Social Fund to live in the community .sx We recommend that , in the light of the outcome of their current study , the Department should examine what further surveys may be needed to provide information about elderly people's requirements in these circumstances .sx The Department would then be better able to assess the extent to which the Fund is achieving its objectives .sx 12 .sx We are glad to note that , through their new computer systems , the Department are seeking improvements to their data base on existing beneficiaries .sx INFORMATION NEEDS OF ELDERLY PEOPLE ABOUT FINANCIAL SUPPORT AVAILABLE .sx 13 .sx Elderly people require information about the support measures available to help meet their needs .sx The qualitative study of elderly people commissioned by the National Audit Office revealed ignorance or misunderstanding on the part of those elderly people interviewed about some of the financial support available .sx In particular , apart from those receiving help from the Independent Living Fund , none of the elderly people taking part in the study , including those receiving Attendance Allowance , had heard of that Fund .sx 14 .sx The Department told us that the existence of the Independent Living Fund was drawn to the attention of new recipients of Attendance Allowance on their award notices , but that more widespread publicity posed problems because the Fund had been set up on a temporary basis and on a very small scale .sx 15 .sx The Department told us that they were planning to improve the information provided on the availability of Social Fund community care grants , through the production of a new leaflet .sx They are also looking to the results of research currently in hand to identify what further publicity might be needed .sx Conclusions 16 .sx The provision of information about the availability of financial support is especially important for elderly people , many of whom have mobility problems and other disabilities , and so may have difficulty in obtaining information for themselves .sx We recommend that the Department should give further attention to tailoring publicity about benefits , and other forms of financial assistance funded by the Department , to the particular information needs of elderly people , as illustrated in the National Audit Office study .sx 17 .sx We welcome the efforts the Department are making to improve the publicity given to the Social Fund .sx The limited publicity so far provided by the Department about the Independent Living Fund is , however , unsatisfactory in our view , giving rise to the danger that many people who may be eligible for help from the Fund may not hear about it .sx Consequently , taxpayers' money may not be distributed in an even-handed manner .sx This limited publicity is not acceptable and we recommend that , as a minimum step , information about the Fund should be given to all recipients of Attendance Allowance who are eligible to apply to the Fund for assistance .sx THE DEPARTMENT'S APPRAISAL OF THE LIKELY TAKE UP OF PERSONAL PENSIONS .sx 18 .sx Since 1988 employees have been entitled to contract out of the state earnings-related pension scheme and take out a personal pension from an insurance company , unit trust , bank , or other approved body .sx Those who take out such a personal pension , or who join a newly contracted out occupational pension scheme , benefit from a flat rate rebate of National Insurance contributions .sx For the period to April 1993 , the rebate has been set at 5.8 per cent fo their relevant earnings .sx For the same period , there is also a special incentive of 2 per cent of relevant earnings .sx 19 .sx In 1986 , the Government Actuary advised that there was no basis for making a firm estimate of the likely number of people contracting out as a result of the rebate and incentive offered .sx But he published illustrative calculations of the possible long-term savings to the National Insurance Fund based on half a million , two million and five million contracting out .sx