An inspectorate of the Department for Work and Pensions.

Report

Charter Mark - Awarded for excellence

Summary

Introduction

1.1 Local authorities (LAs) pay over £13.7 billion to around 4.5 million people in Housing Benefit (HB) and Council Tax Benefit (CTB). LB Haringey paid out over £171.5 million in benefits in 1999/2000. This is the fifth highest total in the UK and the highest in London.

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

1.3 The Benefit Fraud Inspectorate (BFI) is an integral part of this strategy. Through our reports on LAs and Department for Work and Pensions (DWP) (formerly the Department of Social Security) agencies we aim to:

1.4 In our inspection of LB Haringey we looked at the administration of HB and CTB and the processes and procedures that LB Haringey uses to prevent, detect and investigate benefit fraud. Our findings are set out against the 4 main headings of the government’s safeguarding social security strategy.

Main findings and conclusions

1.5 LB Haringey’s background of ethnic diversity and economic and social deprivation gives a challenging environment in which to deliver a benefit service. We found that LB Haringey has made considerable improvements in many areas, particularly in re-designing processes to improve performance. Quality improvements have been less dramatic and LB Haringey should now focus on these areas to make further gains in the effectiveness and security of its service.

Getting it right

1.6 LB Haringey is achieving many of the requirements of Getting it right. This is particularly true in areas of customer service and the speed of processing new claims for benefit. Most of our concerns can be addressed by fully implementing VF, planned for April 2001. Following the on-site phase of our inspection, LB Haringey told us it became VF compliant in February.

1.7 The speed of processing new claims was very good. All the cases in our sample were determined within 14 days of the information being available and performance on the average time taken to determine a claim from the date of receipt was 17.5 days. This is highly commendable.

1.8 Performance on verifying evidence to support claims was less encouraging. Staff clearly understood the need to verify claim details, but sampling revealed significant weaknesses, XXXX XXXX

1.9 We found a high number of defective claims. The absence of a management checking regime will lead to worsening performance in qualitative areas. The section Making sure things work makes recommendations for improvement in this area. LB Haringey believes it has now addressed this point, in conjunction with implementing VF.

1.10 The corporate Access to Services project seeks to bring together the front end of a number of the LB Haringey's services. It will affect the telephone call centre and public services provided by the area offices and one stop shops. The project is ambitious and will require careful design and planning to succeed. Our concern is that it does not have a negative impact on the services given to benefit customers.

1.11 LB Haringey's claim form has the Plain English Campaign's Crystal Mark for plain English. However, our sampling showed that 65% of cases need further information before processing, showing the scope for improvements to the form. Our analysis also highlights some relevant information that the current form will not collect. The notices of determination also need some amendment to comply fully with regulations.

1.12 It is encouraging to report that LB Haringey’s arrangements for opening post are basically sound. We had no concerns about the arrangements for the control, recording and reconciliation of valuables.

1.13 The relationship between LB Haringey and the Rent Service (RS) is a little strained. An estimated 30% of referrals to the Rent Officer (RO) are returned for more information and an issue surrounding backdated referrals for renewal claims has still to be resolved. We recommend that LB Haringey and RS agree a service level agreement (SLA) as soon as possible.

1.14 We examined the way LB Haringey deals with benefit claims from homeless people. We found that high rent levels and out of town properties are features for concern. Both practices should be reviewed.

1.15 Working relations between Benefits Agency (BA) and LB Haringey were reported by both sides to be very good. We found evidence that there are regular meetings and that issues arising are taken forward. There has been no major closer working initiative yet, although LB Haringey will be providing awareness training in 2001.

Keeping it right

1.16 Keeping it right shows similar strengths and weakness to Getting it right. We commend LB Haringey for processing a high number of renewal claims within 14 days of receipt of all information, in 88% of rent rebate (RR) cases and 93% of rent allowance (RA) cases. It has made a great effort to improve in this area, clearing a large backlog. However, this is at a cost of poor quality verification and some other quality issues.

1.17 Verification standards in renewal claims are poor and are less stringent than for new claims. This is unacceptable, but should be resolved by implementing VF.

1.18 HB and CTB regulations require the benefit award period to reflect the individual circumstances of the claim. LB Haringey is not complying fully with this requirement in all cases. Improvements in this area will help to reduce overpayments and reduce the opportunities for fraud and error to enter the system.

1.19 LB Haringey has introduced the risk categories recommended in VF. But it must do more in aligning benefit periods with different levels of risk and tailoring periods to claimant’s circumstances. The current procedures provide no assurance that different levels of inherent risk are being addressed.

1.20 Requests for review and further review are subject to considerable delays. Claimants receive a poor standard of service, and LB Haringey is not meeting its statutory requirements. The number of review boards held is inadequate for the volume of work. The process is also flawed by allowing the double-handling of an appeal before a review board has heard the case.

1.21 LB Haringey has secure systems for dispatching payments accurately and for reconciling benefit cheques. Similarly, it has adequate controls safeguarding the integrity and security of IT systems and information. However, it must make efforts to ensure it deletes access and permissions of staff who leave or change jobs

Putting it right

1.22 LB Haringey’s performance in Putting it right is patchy. Its counter fraud efforts are meeting with some success, but the achievements in controlling and recovering overpayments are less encouraging. LB Haringey has over £15 million of benefit overpayment debt which continues to rise. We identified delays and lack of action at many stages of the overpayment process.

1.23 The counter fraud effort is split between investigation, internal fraud and visiting. The division between investigation and residency checking may have outlived its usefulness, as visits show a poor return for the investment made. We question the overall resources used in countering fraud and whether the benefit operation is sufficiently fraud-minded, for example, in overpayment recovery.

1.24 We identified significant variations in investigation quality. This is partly to be expected as there is no formal sift process of referrals. The number of inadequate investigations points to problems with resources, training or referral quality. We make recommendations to improve these areas. Similarly, we recommend widening the range of investigation methods to include more observations and the inspection powers available to LAs for some years.

1.25 We tested the validity of LB Haringey’s WBS claims and found that 26% of claims were invalid. This is an unacceptable level of error, but it is significantly better than many of the LAs we have inspected.

1.26 LB Haringey's Benefit Investigation Service (BIS) has generally effective links with BA's Benefit Fraud Investigation Service (BFIS), but we were surprised that BFIS tried use the Data Protection Act to avoid sharing information in one of the cases we reviewed.

1.27 LB Haringey tries to use of data matching to identify potentially fraudulent claims. However, some of this work either gives a low rate of return or too many matches to handle. This may be due to the match criteria being too widely drawn.

1.28 LB Haringey needs to increase the number of fraudsters it prosecutes, given the amount of fraud in the area. It has acknowledged this and has set investigators individual targets for prosecutions and cautions. An effective relationship with the legal services section will be needed to support these planned increases.

1.29 In Keeping it right we identify weaknesses in deciding the length of benefit award periods. This increases the number and value of overpayments. Of overpayments in our sample, 14% could have been partially or fully prevented.

1.30 The benefits service targets identifying overpayments either within 3 working days or before the next relevant payment run. Our analysis shows an average time between being notified and re-assessing of 16 days. It is clear that some re-determinations are subject to significant delay but the target’s nature makes it difficult to judge its effectiveness.

1.31 The accuracy of classifying overpayments is low. There is an unacceptably high error rate of 21%. Of the overpayments classified as fraud many do not contain sufficient evidence to justify the decision.

1.32 There is evidence that LB Haringey is making serious efforts to recover overpaid benefit, such as:

Making sure things work

1.33 The current planning arrangements set an effective context for the benefit service. We found commitment at senior management and Member level to the authority’s stance against fraud, shown by the detailed anti-fraud strategy document and the high profile given to benefit fraud in its disciplinary code of guidance.

1.34 The benefit unit uses a range of targets and performance indicators. Getting it right and Keeping it right show that the emphasis has been on quantitative measures of throughput rather than quality issues. LB Haringey needs to develop a range of targets, measures and indicators to focus attention on these areas.

1.35 Because the scheme of management checks has fallen into disuse, LB Haringey is not in a position to generate information to monitor staff performance, training needs, or the impact of new legislation or procedures on its work.

1.36 We reviewed the coverage and effectiveness of the work done by auditors and the responses made to addressing their recommendations. The resources Internal Audit (IA) devotes to benefits seems a little low, but the outcome is effective in testing key controls and objectives. The mechanisms for reporting audit findings to Members are robust and recommendations are acted upon. The managed audit approach leaves External Audit (EA) concentrating mainly on the claims for subsidy and weekly benefit savings (WBS). Its work reveals longstanding problems in reconciling areas of benefit spend, the likely effect of which is to lose subsidy. Work on WBS claims follows District Audit (DA) guidance and includes testing for compliance with the requirements of the subsidy order.

1.37 Many of the recommendations made in this report require staff training. As LB Haringey moves towards VF compliance and closer working with the Council Tax section the need for dedicated training support is likely to increase. No training officer for benefits is in post at present but appointing one should enable training to be properly planned and co-ordinated. This could build on the good levels of guidance and procedure notes currently available to staff.