Findings

Introduction

2.1 Lambeth is one of 13 inner London Boroughs. It measures approximately 7 miles north to south and 2.5 miles east to west. The Borough has the largest population of an inner London Borough at 269,500. It is one of the most ethnically diverse boroughs in Great Britain. People from ethnic minorities make up 34% of the population, the 7th highest proportion for a London Borough. Lambeth’s Best Value Performance plan for 2000/01 identifies that approximately 110 languages are spoken in the Borough.(Source Lambeth’s Best Value performance plan 2000/01)

2.2 The Department of the Environment, Transport and the Regions’ (DETR’s) index of Local Deprivation (1998) measures deprivation using a series of 12 indicators. Lambeth is classified as deprived for all but 2 of these. Lambeth was ranked 12th for the degree of overall deprivation out of all 354 English LAs and 7th out of the 33 London authorities.

Employment

2.3 Lambeth has an acute unemployment problem as Figure 2.1 shows.

Fig. 2.1: Unemployment rates – February 2000

	Rate (%)
Lambeth	9.4
Inner London average	8.3
UK average	4.4
Greater London average	5.5

Source: House of Commons Library

2.4 The unemployment problem is compounded by the length of time people remain unemployed: 45% have been unemployed for over 6 months.

2.5 88% of the businesses in the Borough employ fewer than 25 people. The public sector is the largest employer.

New claims

2.6 The number of new benefit claims assessed and paid between 1997/98 and 1999/2000 is shown in Figure 2.2.

Fig. 2.2: Lambeth new claims assessed and paid – 1997/98 to 1999/2000

Benefit	1997/98	1998/99	1999/2000
RA	17,673	13,249	12,102
Rent Rebate (RR)	14,410	12,873	9,411
CTB	21,723	20,714	15,844
Total	53,806	46,836	37,357

Source: Lambeth

Benefit expenditure

2.7 During 1999/2000 Lambeth assessed and paid 37,000 new claims – about 16,000 less than it assessed and paid in 1997/98. This is a significant reduction. We discussed this with Lambeth and were told that data was not available on the number of new claims received. However, Lambeth attributed the drop in cases assessed and paid to:

• a nation-wide reduction in the number of people claiming HB
• the problems encountered in accurately calculating the caseload when in a backlog
• the conversion to Academy in January 2000 when users were slow in becoming familiar with the system and the number of new claims determined fell sharply between November 1999 and March 2000.

Fig. 2.7: RBU organisation chart

2.8 We compared HB and CTB expenditure as a percentage of gross revenue expenditure. Figure 2.3 shows that HB and CTB expenditure decreased to reflect the reduction in the number of new and renewal claims assessed and paid.

Fig. 2.3: Revenue expenditure compared to HB expenditure

	Gross Lambeth revenue expenditure (£ million)	HB/CTB expenditure (£ million)	HB/CTB (%)
1997/98	690.4	163.3	23.6
1998/99	672.9	144.5	21.5
1999/2000	730.1	146.3	20.0

Source: Lambeth

2.9 Figure 2.4 shows the total amount of Lambeth’s benefit expenditure for 1999/2000.

Fig. 2.4: Benefit expenditure 1999/2000

Benefit	Amount (£)
RA	62,161,667
RR	66,982,916
CTB	17,227,048
Total	146,371,631

Source: Lambeth

2.10 Figure 2.5 shows details of the amounts of RA paid to claimants for the period from January 2000 to March 2000. This is the first data available following Lambeth’s move to the Academy software system on 5 January 2000.

Fig. 2.5: Rent allowance paid between January and March 2000

	£	% of total
RA paid direct to tenants	2,982,789	25.61
RA paid direct to landlords	3,093,349	26.56
RA paid direct to HA tenants	175,005	1.5
RA paid direct to HAs	5,395,134	46.32
Total RA	11,646,277	100

Source: Lambeth

Risks to the integrity of HB/CTB

2.11 We found a number of risks that affect the integrity of benefit administration in Lambeth. Examples are:

• poor verification of claims
• management checks not being systematically carried out
• poor standard of documentation
• areas where duties have not been separated
• poor accuracy and interpretation of management information
• weaknesses in IT security.

2.12 We have referred to these and other areas throughout the report but analyse the risks in more detail in Appendix A.

Management structure

2.13 Lambeth implemented a Cabinet style political decision making process in 1999/2000. There are 6 Directorates, with each Directorate Secretary being a Member of the council who leads on policies within the Directorate’s particular area. The Cabinet receives reports from Directorates on policy issues for consideration and progress to the Policy Committee. In addition, a Standards Committee was set up, along with a cross-party Scrutiny Committee of backbench councillors, to review the work of the LA.

2.14 The 6 Directorates are:

• Environmental Services
• Education
• Chief Executive’s Office and Borough Solicitors Office
• Social Services
• Finance & Corporate Services
• Housing.

2.15 Benefit administration was outsourced in 1997 in an attempt to provide a better service to claimants and bring economic efficiencies. The tender was based on a Voluntary Competitive Tender. The contract for HB and CTB was included in the same package as Council Tax, National Non-Domestic Rates (NNDR) and Cashier services. Capita won the contract. We go into more detail about the contract and contract monitoring in the Making sure things work section of this report.

2.16 Capita operates its HB administration from OMH. Telephone enquiries from Lambeth residents are dealt with by Capita’s telephone call centre in Coventry.

The client side

2.17 The Head of Corporate Commissioning (HCC) is responsible for the Corporate Commissioning Unit (CCU) and reports directly to the Executive Director of Finance and Corporate Services.

2.18 The CCU is a central unit that deals with all the authority’s departments. The CCU:

• monitors all contracts for Lambeth. It also gives advice on procurement and contracting out of all services
• administers HB and CTB policy matters
• deals with subsidy issues
• controls the determination process
• monitors the Revenues, Benefits and frontline Cashier services.

2.19 Figure 2.6 provides details of the CCU structure at the time of our visit.

Fig. 2.6 Corporate Commissioning Unit structure

Source: Lambeth

2.20 The HCC is responsible for the monitoring of the HB and CTB part of the contract. Within the CCU the Residual Benefits Unit (RBU) is responsible for determining claims made by Capita.

2.21 At the time of our visit there were 15 people working on the RBU. Figure 2.7 shows the organisation chart for the RBU at the time of our visit.

Source: Lambeth

Capita

2.22 Figure 2.8 shows the organisation chart for Capita (Lambeth site) at the time of our visit. Capita did not know the number of staff working on each of the sections.

Fig. 2.8: Capita organisation chart

Source: Lambeth

Corporate Anti-Fraud Team

2.23 In 1997, as a result of an internal report in 1995, Lambeth created a CAFT. The aim was to bring about change in the corporate attitude towards fraud and corruption, and create an anti-fraud culture. CAFT had a 3-year plan to achieve this with HB only part of the wide CAFT brief. We discuss the performance of CAFT in more detail in Putting it right.

2.24 There are number of functions that CAFT carries out that would normally be split between IA and a fraud team within the HB section. This appears to have caused some friction between CAFT and IA.

2.25 Lambeth has identified that the service was ready for a BV review. This was moving towards the report stage whilst we were on site. We understand that there may be some radical changes to the structure of CAFT once the report has been completed.

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