Foreword

The Benefit Fraud Inspectorate recently inspected Housing Benefit and Council Tax Benefit administration and counter fraud measures in the London Borough
of Barnet.

Barnet is an outer London Borough and is thirty third (based on 1997/98 figures) in the list of highest spending local authorities on Housing Benefit and Council Tax Benefit. In population size it is the second-largest of the 33 London Boroughs. In 1998/99 it paid out over £89.5 million in Housing Benefit and Council Tax Benefit to approximately 25,000 claimants, representing about 20% of its total expenditure.

Barnet’s administration of Housing Benefit and Council Tax Benefit is operationally satisfactory in most areas supported by much staff commitment and some good initiatives. Two areas where we found a good initiative and good performance were the excellent customer service access points and the achievement against the 14-day determination/payment target. Against this we also found significant weaknesses, in particular security of the gateway to benefits was poor and the identification, classification and recovery of overpayments, particularly that of fraudulent overpayments, was very weak.

Barnet is seeking to implement the Verification Framework in April 2000. If the Verification Framework is fully implemented, Barnet will be in a position to give a better level of assurance on the integrity of claims.

Also of particular concern to us was the limited allocation of internal audit resources to benefits administration and counter fraud activities. This was part of a wider picture of a lack of corporate commitment, especially at senior levels, to effective steps to counter fraud, not only in its specific fraud investigation section, but more generally in the administration of benefits. Barnet needs to further enhance and secure its administration by developing comprehensive and adequate preventative and deterrent measures. Improving its deterrent and preventative measures would offer a greater level of assurance that the systems and processes are protected from internal and external fraud.

The counter fraud performance on the other hand is very poor and we have particular concerns about the quality of the investigative work and the management of Barnet’s anti-fraud investigation section.

If it is to improve its counter fraud measures and better secure the benefits system, Barnet needs to:

• appoint sufficient experienced fraud investigation officers
• enhance its training provision and written procedural guidance for fraud investigation officers to ensure full and effective use of all resources
• develop and implement management checks on all investigation work so as to ensure all investigations are carried out to a high standard
• demonstrate a meaningful level of commitment to securing the system at a senior level, not least by an adequate allocation of resources.

We discussed this report in draft with Barnet who assured us that it is committed to addressing the serious weaknesses and deficiencies identified. We have been told that a number of initiatives to fulfil this commitment have already been started but we have not been able to test the extent of these initiatives or assess any success.

On behalf of the BFI I thank the officers and staff of Barnet for their support and co-operation during our inspection.

Susan Lingwood

Acting Inspector
Benefit Fraud Inspectorate