Section 4:
Major recommendations
Benefit administration
4.1 There are 3 main areas in which Tower Hamlets can improve benefit administration. It can:
- ensure consistent standards of claim verification
- improve working relationships with BA and ES
- strengthen overpayment recovery procedures.
Ensuring consistent standards of claim verification
4.2 Tower Hamlets should ensure that the standards of checking of claims across sites is consistent, has clearly stated procedures and is raised to a minimum of 10%. The checks should differentiate between payment and non-payment errors. Our inspections of other LAs which have a sound system of quality checking procedures clearly demonstrate a number of benefits. For example:
- problems with staff performance can be readily identified, which means that Tower Hamlets can tailor its training requirements to address them
- reduced administrative costs due to re-work by staff
- the accuracy and security of determinations and payments made will be assured, thus reducing the cost to Tower Hamlets General Fund. As an example, a 5% reduction in the value of claims paid could reduce Tower Hamlets’ administrative expenditure by £250,000.
4.3 We identified varying levels of performance at the AHCs and consider that Tower Hamlets should provide staff with clear instructions on how to determine HB and CTB. This will ensure that verification of claims is undertaken in a like manner at each of the AHCs, and that all subsequent action on claims will be undertaken in the same way. This will support Tower Hamlets’ stated commitment to providing a quality service to those living in the borough.
4.4 We make a conservative estimate that there will be a cost to Tower Hamlets of £3,500. This estimate includes producing 35 policy and procedure notes which should be formatted as a manual at a cost of £100 each.
4.5 Tower Hamlets might wish to consider introducing a series of regular test checks on the manuals to ensure that updates are included and that staff are working to current regulations, thereby ensuring that any determinations they make are accurate and secure.
4.6 Tower Hamlets can improve verification activities on renewal claims. XX XXXXXXXXXX XXXXX XXXX XX XXX XXXXX XXX XXXXXXXXXXX XXXXXXXXXXXXX XXXXXXX XXXXX
Improving working relationships with BA and ES
4.8 Tower Hamlets should continue to try to ensure that BA and ES staff have a good understanding of HB and CTB. This can be achieved by educating ES and BA staff about the impact of their work on Tower Hamlets’ HB and CTB claims.
4.9 There is significant scope for the 3 organisations to work closely together. The benefits would be to:
- reduce the amount of enquiries Tower Hamlets makes to ES and BA in order to confirm receipt of IS or JSA
- help Tower Hamlets determine claims to HB and CTB quickly and accurately.
4.10 Working together with ES and BA to improve the verification process should lead to a reduction in Tower Hamlets' administrative costs and provide assurance that HB and CTB payments are made on legitimate claims to benefit.
4.11 At present Tower Hamlets does not make use of BA to recover HB from other social security benefits, with consequent loss of revenue. Tower Hamlets uses debt collectors to recover money from ex-claimants with a success rate of approximately 30%. This does not take into account the cost of the service these agencies provide. Making use of BA to recover overpayments comes at a nil cost to Tower Hamlets, while increasing its potential revenue.
4.12 Liaison with BA could be improved to ensure that claimants’ changes of circumstances are notified quickly. We estimate BA failed to inform Tower Hamlets of overpayments valued at £267,000. Our sampling identified £2,000 of potential overpaid HB/CTB due to BA’s failure to notify change of circumstances.
4.13 We recommend that Tower Hamlets and BA ensure that the procedures they have in place for notifying each other of changes of circumstances, particularly fraudulent overpayments, operate.
Strengthening overpayment recovery procedures
4.14 At present Tower Hamlets does not have a co-ordinated approach to the recovery of overpaid HB. However, we consider that tightening the system for managing the recovery of overpayments would mean:
- claimants would be aware that failure to report changes of circumstances on time would incur costs to them
- any recovered overpayments can be kept.
4.15 To improve performance Tower Hamlets should:
- operate a co-ordinated approach to the recovery and monitoring of overpayments, including write-offs
- recover HB overpayments from landlords
- maintain a consistent approach between rent allowance and rent rebate cases on setting recovery levels
- undertake management checks on overpayment calculations and recovery action
- make use of BA to recover overpayments of HB and CTB from other social security benefits
- set targets for overpayment recovery
- take steps to reduce the number of overpayments created internally.
4.16 Other LAs that have exhibited good practice, for example Leicester City Council, have dedicated officers for the management and recovery of overpayments. Their experience has shown that this leads to an improved recovery rate, and also provides the opportunity to identify causes of overpayments. This is particularly useful when trying to limit the numbers of LA error overpayments.
Counter fraud
4.17 Tower Hamlets could do more in all areas of its counter fraud work, as it may be facing a potential fraud stock of some £6 million.
4.18 We recommend that Tower Hamlets works with BA to identify the fraud risks it faces and directs counter fraud efforts against these risks.
Risk analysis
4.19 We identified a number of areas where Tower Hamlets does not apply a risk based approach to its counter fraud activities, even though a lot of local and national data is available to help it to do so.
4.20 We therefore recommend that it XXXXXX XX XXXXX XXXXXXXXX XXXXX makes use of the information contained in DSS’s National Housing Benefit Accuracy Review 1997/98 and the VF. The advantage of using information in this way is that Tower Hamlets could focus counter fraud effort better, for example, on RR claims where we estimate there is a stock of fraud which is not investigated.
Making new claims visits
4.21 Tower Hamlets benefit staff carry out pre-award visits for new claims independently from fraud staff and BA. We consider that Tower Hamlets’ counter fraud efforts would benefit from targeting high risk groups.
4.22 To support its stated commitment to customer service and reduce the possibility of duplication with BA, we recommend that Tower Hamlets and BA co-ordinate on visits. Other LAs and BA have agreed procedures whereby they notify each other when a pre-award visit has taken place, thus reducing duplication and costs.
4.23 In addition, having set procedures for staff to follow will ensure that all claimants are treated equally and would allow staff to focus their efforts on areas most likely to be at risk from fraudulent activity.
Improving investigative work
4.24 We found differences in the approach to investigating different types of fraud, and in the way files are set up. We recommend that the fraud investigation team adopts consistent working methods.
4.25 The benefit of improving the quality of investigators’ working methods is that completed fraud investigations should provide consistent evidence to support prosecutions, administrative penalties and claims for WBS.
4.26 As a minimum, sufficient evidence should be available to support the classification of any overpayment as fraudulent. Any overpayment recovered can be retained by Tower Hamlets.
* Highlighted parts of this report are omitted from the published version as they may assist fraudsters or may contain confidential commercial information.