Introduction

1.1 Local Authorities (LAs) pay over £13.7 billion to 4.5 million people in Housing Benefit (HB) and Council Tax Benefit (CTB). The London Borough of Lewisham (Lewisham) paid out nearly £111 million in HB and CTB in 1999/2000.

1.2 Lewisham plays a major role in the social and economic development of the area. Its vision is "Together we will make Lewisham the best place in London to live, work and learn" and it works to a service plan that sets out:

its objectives
the timescales for achieving the objectives
the means of evaluation or measurement.

1.3 A new contract for welfare: SAFEGUARDING SOCIAL SECURITY set out the government’s strategy for tackling fraud in benefits. It called for sustained and detailed effort across 4 fronts:

getting it right – benefit payments should be correct from day one
keeping it right – ensuring payments are adjusted as circumstances change
putting it right – detecting when payments go wrong and taking prompt action to correct them, with appropriate penalties to prevent a recurrence
making sure things work –monitoring progress, evaluating the strength of defences and adjusting them in light of experience.

1.4 The Benefit Fraud Inspectorate (BFI) is an integral part of this strategy. Through our reports on LAs and Department of Social Security (DSS) agencies we aim to:

identify areas where improvements can be made within benefit administration to raise overall standards
make recommendations to address weaknesses
identify and spread good practices among administrators.

1.5 In our inspection of Lewisham we looked at the administration of HB and CTB and the processes and procedures Lewisham uses to prevent, detect and investigate HB and CTB fraud.

Main findings and conclusions

1.6 We found many good practices in Lewisham’s HB and CTB administration, especially in its provision of customer service and use of IT. Lewisham has been a partner in a number of closer working initiatives with BA and has been involved in several high profile projects, for example Lewisham Integrated Service Prototype (LISP).

1.7 Lewisham has a corporate anti-fraud culture underpinned by a number of counter fraud policies and measures. We found some good practices in Lewisham’s counter fraud measures, although there are some gaps in the investigation process and control of counter fraud work, which dilute the overall effectiveness.

1.8 Lewisham is committed to continuous improvement and has already indicated its intention to remedy all the relatively few shortcomings detailed in the Findings section of the report.

Getting it right

1.9 We found that Lewisham demonstrated its commitment to getting it right by:

providing a high quality public enquiry service with some innovative measures to make it easily accessible to the public
providing a secure post opening operation
implementing the Verification Framework (VF) in October 1998 and largely complying with its requirements
using a range of IT systems to manage and control the administration of the HB and CTB schemes
working with the Benefits Agency (BA) on a range of initiatives, including:
- LISP
- Electronic Transfer of Data (ETD)
- joint claim taking
- co-ordination of security visiting
maintaining a good working relationship with the Rent Service (RS)
working with private landlords and Housing Associations (HAs).

1.10 All these measures and practices help eliminate fraud and error. Evidence from an exercise by Lewisham’s fraud investigators supports our view that Lewisham has in place sound verification of new claims. The investigation did not find any discrepancies in declared and actual income that had evaded Lewisham’s VF procedures.

1.11 Further improvement of Lewisham’s performance in getting it right and 100% verification of all new claims could be achieved by:

changing the layout and some content of the HB and CTB claim form to make it easy for claimants to complete first time round
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ensuring that all claim forms received in neighbourhood housing offices (NHOs) are immediately sent for determination
referring all appropriate rent allowance (RA) claims to the Rent Officer (RO) and formalising the regular meetings with the RO.

Keeping it right

1.12 Lewisham has a range of measures and practices to keep payment of benefit prompt and secure when handling renewal claims and changes of circumstances. These include:

tailoring benefit periods to known future changes in a claimant’s circumstances and allocating claimants to appropriate VF risk groups
using a specialist team to deal promptly with notified changes of circumstances, so reducing the risk of overpayments
establishing good liaison arrangements with private sector landlords and HAs making them aware of their duty to promptly notify changes of circumstances which affect the benefit entitlement
maintaining adequate processes to verify renewal claims. XXXXX XXXXX XXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX X XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XX
developing and maintaining a database to manage and control checks on entitlement made by post and by visit
ensuring secure and prompt payment of HB and CTB by using a number of payment methods
using the provisions of section 75(7) of the Social Security Administration Act 1992 and charging orders to recover overpayments from private sector landlords
Lewisham’s average recovery rate of total overpayments is low. This includes the total amount awaiting recovery including that brought forward from the previous year.

1.13 There are opportunities for Lewisham to enhance these effective measures by:

revising the notices of determination to achieve compliance with the requirements of Schedule 6
obtaining evidence of continuing rent liability for all RA renewal claims
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further developing the visiting and postal checks database so that it can be used to its fullest potential.

1.14 Lewisham’s average recovery rate of total overpayments is low, because claw-back rates are relatively low in relation to the level of debt.

Putting it right

1.15 Lewisham amalgamated 2 fraud investigation teams in Revenues and Benefits under the Resources Directorate.

1.16 There is written procedural guidance, and a range of training has been provided. Despite these measures we found inconsistency in the investigative methods used, largely due to the differing working practices of the former teams. Some investigations were of a good standard, but others lacked depth and did not uphold the Weekly Benefit Savings (WBS) claimed on them. XXXXX XXXXX XXX
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1.17 Managers monitor the performance of the counter fraud team, checking a range of cases selected by reference to agreed criteria. This is good practice which could be improved if the results of the management checks were collated to produce an overall illustration of the progress and effectiveness of counter fraud work.

1.18 As in other areas of work, Lewisham uses a range of IT solutions to support fraud investigations. These include a case management system and independent databases. Data is inconsistently recorded and cannot be used effectively for risk analysis.

1.19 Fraud awareness training is provided to staff in HB, Council Tax and NHOs and externally to organisations such as pensioners groups, landlords and the RS. This provides fraud referrals from a number of sources.

1.20 Lewisham also participates in data matching (both National Fraud Initiative (NFI) and Housing Benefit Matching Service (HBMS)) and carries out its own proactive fraud drives. This has ensured a regular flow of fraud cases from a wide variety of sources.

1.21 Lewisham actively pursues prosecutions and administrative penalties and refers all potential cases to a prosecution panel. Although the panel may benefit from more specific guidance, we found that HB and CTB work is well supported by Lewisham’s own Legal Services and in 1999/2000 Lewisham has brought 12 prosecutions, all of which have succeeded.

1.22 Lewisham and the Benefit Fraud Investigation Service (BFIS) report a close working relationship and are involved in various closer working initiatives, although this is not underpinned by the Service Level Agreement (SLA), which is not treated as a working document.

1.23 Lewisham takes a proactive approach towards its counter fraud work. Our recommendations aim to link up existing good practices to strengthen the overall operation.

Making sure things work

1.24 Corporately Lewisham is committed to "the highest standards of probity and conduct in the administration of the borough". The corporate counter fraud policy and whistle blowing policy are evidence of this commitment.

1.25 Lewisham has a Special Investigation Unit (SIU), based in Internal Audit (IA). This has been set up to investigate all allegations of impropriety and fraud made against Lewisham Members and employees.

1.26 Lewisham’s IA section works closely with HB and CTB administration and counter fraud staff. IA has reported on a number of important aspects of HB and CTB work such as Document Image Processing (DIP) and VF. It also carries out formal managed audits on behalf of District Audit.

1.27 Lewisham has comprehensive monthly performance monitoring reports, which are sent to Members. The performance monitoring reports contain data on the performance of the housing benefits section, including the fraud investigation team and customer services.