Findings: How good is Ashford’s counter-fraud service?

68 Inspectors look to see how a council has agreed the key aims for the service being inspected, how clear these aims are to the people that receive the service and whether these reflect the corporate aims of the organisation as a whole.

Are the aims clear and challenging?

69 Ashford’s aims in addressing benefit fraud are defined in its policy and strategy document for the Visiting Officer Team (VOT). This is supported by its prosecution policy, initiatives document, and business plan.

70 The corporate objective to reduce crime and disorder has been reflected in ABS's commitment to pursuing sanctions against benefit fraudsters.

71 Partnership working, another corporate priority, is exemplified by VOT’s liaison with Weald Police. Ashford’s approach to deterrence and its work with Weald Police are highlighted under Sanctions and liaison with the police.

72 Ashford's corporate aim to reduce crime and disorder, although not explicitly referred to, is dealt with in Ashford’s Counter-Fraud Strategic Plan. This states that ‘the Council is committed to deterring, preventing and detecting benefit fraud and to taking appropriate action against those who commit benefit fraud’.

73 The strategic plan for the fraud service refers to Ashford's counter-fraud initiatives:

• VF
• Royal Mail’s Do Not Redirect service
• The Housing Benefit Matching Service (HBMS)
• A national service level agreement (SLA) with BA
• An agreement with BA for fraud investigators to work together and share information to prevent and detect benefit fraud
• A benefit fraud hotline.

74

The strategic plan also deals with the way Ashford will pursue benefit fraudsters through:

• prosecutions, by passing appropriate cases to Weald Police or BFIS
• cautions, by Ashford’s own counter-fraud staff; and
• administrative penalties, also by Ashford officers.

75 The BVR process led Ashford to focus on working with others to prosecute benefit fraudsters. We saw several documents that detail the changes in Ashford’s approach to prosecutions over the course of the review.

76 We were satisfied that Ashford’s counter-fraud service had clear documented aims. Ashford’s move to strengthen its position on prosecutions suggests that it has made a self-critical assessment of whether the service meets its aims.

77 Although we commend this change, we feel that the scope of change proposed could potentially have been widened to include an explicit commitment to training, quality investigations and professionalism of counter-fraud staff.

78 An information report for the Service Review team (consisting of Members and external service users, as well as a number of Ashford staff) refers to the ‘challenge’ aspect of the review. The report, produced in February 2000, refers to the possibility of outsourcing or joint arrangements to work with other LAs or organisations to secure efficiency gains.

79 Ashford wrote to its neighbouring LAs inviting partnership arrangements. The idea, piloted in East Scotland, was to have a single fraud investigation unit covering all or part of Kent. One LA in Kent responded positively, but two other LAs in Kent have already contracted out their counter-fraud service, making partnership working with Ashford less likely.

80 Ashford had to abandon this form of partnership working due to the lack of interest shown by neighbouring authorities. We are encouraged that Ashford appears to have challenged the service, and although we would have liked to have seen greater changes proposed, we believe that the service has changed to reflect corporate aims.

Does the service meet these aims?

81 Having considered the aims the council has set for the service, Inspectors make an assessment of how well the service is performing in meeting these aims. This involves an assessment of performance against specific standards and targets as well as assessing Ashford's approach to measuring whether it is actually achieving what it sets out to do.

Organisation of fraud work

82 The VOT is part of the Revenues and Benefits service. The senior investigations officer (SIO) manages four visiting officers (VOs) and one administration clerk. The SIO reports to the contracts manager who is the deputy to the Revenues and Benefits Services manager. The SIO is also responsible for Council Tax and benefits reception staff, as well as the staff member who schedules VF visits.

83 As well as fraud investigations, VOT undertakes VF visits, inspections to Council Tax and business rates properties and welfare visits. The VOs spend about 25% of their time on fraud investigations. The SIO spends about 90% on investigative work and 10% managing the section.

84 The SIO was recruited from BFIS in 1994. Under a restructure due in September 2001 his post will be renamed the visiting and customer care manager and he will gain responsibility for cashiering services.

Managing investigations

85 Ashford has satisfied the requirement of BVPI76 to have ‘a written and proactive strategy for combating fraud and error that embraces specified initiatives including those sponsored by the DWP and which is communicated regularly to all staff.’ However, the following points recommended by the BFI Good Practice Guide are not included in the document:

• spelling out the roles and responsibilities of individuals, IA and EA
• details of a whistleblowing policy and procedure
• a statement of steps to be taken when an irregularity is identified
• senior officers to regularly review and refer outcomes to Members; and
• specific reference to other strategies, the role of publicity and codes of conduct.

86 Ashford consider that inclusion of matters such as roles and responsibilities and procedures for dealing with irregularities are not strategic but operational matters.

87 Ashford makes extensive use of performance statistics. These are reported monthly from the FIMS case management system. We were pleased to note that these reports are used to compile data that compares performance with the previous year, and provides cumulative information.

88 Monthly statistics show the:

• number of referrals from benefits processing staff received
• number from above that were successful in identifying fraud
• percentage of above referrals that were successful
• number of above referrals as a percentage of benefit claims made in the year
• number of investigations in month
• number investigated in month that led to proved fraud
• number of prosecutions, cautions (in-house), cautions (Weald Police), and administrative penalties
• number and values of fraud overpayments (analysed by benefit type and compared with previous three years) and
• the percentage of time spent by VOs on cheque deliveries, investigations, VF visits and customer care visits.

89 This is a valuable group of statistics. The extensive use of cumulative and comparative data allows Ashford to use statistics meaningfully.

Generic working

90 Ashford told us that it avoids staff specialising in counter-fraud as a distinct discipline since a specialist would have to cover the whole borough whereas the four generalist staff can split the borough between them, saving travelling time and expenses. Ashford’s view is that this maximises productivity.

91 Our view is that the VOT's working practice could potentially compromise ABS meeting the corporate aim of reducing crime and disorder, and that it hinders ABS from accomplishing its aim of ‘deterring, preventing and detecting benefit fraud’. Indeed, VOT staff expressed the opinion that they would never achieve excellence 'because of generic working.’ Ashford told us it proposes to review generic working in mid 2002 when the whole of the merged Financial Services and Revenues and Benefits services structure is reviewed.

92 Maximum effectiveness in counter-fraud work requires specialist knowledge and experience of benefit regulations, legislation, professional standards and good practice. If an officer is only able to devote 25% of their time to counter-fraud work, this knowledge and experience will, at best, be gained more slowly than if an officer is working full-time. We saw evidence to support our view: an open caseload exceeding 350 cases, and poor quality investigative work. This is discussed below.

Quality of investigations

93 Good quality investigations are important because they:

• establish whether fraud exists and to what extent
• support an LA's counter-fraud policy and demonstrate its commitment to stamping out fraud
• support prosecution, cautions or administrative penalties
• provide sufficient evidence to accurately re-determine claims, raise overpayments and fulfil the WBS criteria
• maximise overpayment recovery and subsidy; and
• maintain the credibility of the investigation team.

94 To help us assess the quality of Ashford’s work, we randomly selected ten cases referred for investigation, where the investigation was closed between 1 April 2000 and 2 July 2001. WBS was claimed in seven of the cases selected and Weald Police successfully prosecuted one case.

95 The sample covered the work of all VOT staff, including the SIO. The sample showed that:

• three of the seven claims for WBS were invalid
• one of the files closed as ‘no fraud’ should not have been opened in the first place
• two of the ten cases were ‘living togethers’ and had not been investigated properly (although we did confirm the WBS claimed)
• it was not clear where the investigation had originated from on three of the cases; and
• one of the cases where fraud had not been established had been referred to the police for prosecution.

96 All cases closed by an officer with a status of ‘fraud proven’ are passed for the verification of WBS to the review and development support officer. We were pleased to see this internal control mechanism. All seven of the cases in our sample had their WBS verified and claimed at the time of our inspection, and three of these were invalid.

97 Although the sample was small, the SIO confirmed that the issues raised exist more generally. Other issues emerged from our sampling and staff interviews. For example:

• ‘Living together’ investigations are done without reference to the partner’s income. Claims are being cancelled as a result, but there may be entitlement to benefit. In the two cases above, we confirmed WBS. However, Ashford is not routinely checking such cases, and may therefore be routinely overstating its WBS figures.
• Observations are not always carried out during investigations. The VOT, due to resourcing difficulties, does not have sufficient time to undertake every surveillance case it would wish to.
• Records detailing documentation and actions taken on cases are incomplete. This made it difficult to fully assess the quality of officers’ work. This also raises serious doubts about the integrity of evidence held and may compromise prosecutions. We refer Ashford to the requirements of the Police and Criminal Evidence Act 1996.
• The administration clerk for VOT was routinely suspending benefit on the system and issuing determination letters relating to suspension to claimants. This blurring of roles can damage the objectivity of both the investigation team and the benefits service. It is important that benefits staff alone are responsible for making formal decisions about eligibility to benefit, and that investigators restrict themselves to their independent role of investigation and reporting. Ashford told us that it would stop this practice immediately.

Management checks

98 The SIO follows up a random sample of visits with telephone calls to claimants. He phones to find out if the VO introduced himself, whether they were courteous throughout the interview, and whether they presented information clearly. We were pleased to see evidence of these checks. The SIO told us that claimants responded positively to this kind of checking.

99 In the past, all investigation cases were passed to the SIO for formal closure. This could be viewed as a 100% management check. But this process had changed by the time of our visit, leaving the telephone checking as the only management check undertaken by the SIO.

100 We recommend that the SIO undertakes to sample ten per cent of closed cases each month to check, as a minimum, for the quality of decision making, level of understanding, and depth of investigation.

Sanctions and liaison with the police

101 During its BVR Ashford sought to strengthen its commitment to taking prosecutions against benefit offenders, working with Weald Police and CPS. It demonstrated this commitment by:

• setting annual targets for the number of prosecutions, administration penalties and cautions;
• fostering close links with Weald Police and BA;
• forming a memorandum of understanding with Weald Police that commits the police to act on prosecution and caution referrals;
• training its staff in how to undertake interviews under caution;
• amending its prosecution policy to bring it in line with current DWP guidance; and
• undertaking its own administrative penalties and cautions, as well as taking steps to undertake in-house prosecutions in the future.

102 We commend Ashford for these actions. Prosecutions and other penalties act as a deterrent to potential fraudsters. This sanctions policy supports Ashford’s corporate aim of reducing crime and disorder.

103 We consider Ashford’s five-year target setting to be commendable. However, we have concerns about whether Ashford can achieve its prosecutions targets. We consider that the VOT has not had enough input to the setting of prosecutions targets.

104 Prosecutions are a resource strain on Ashford as well as the police. It is important therefore that targets are realistic, that there is ownership of targets by Ashford staff and the police, and that sufficient resources are put in place.

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106 Ashford has recognised that its memorandum of understanding with Weald Police is a short-term answer to its need to take forward effective prosecutions and learn about the processes involved in prosecutions and cautions. It is also an excellent example of partnership working and so supports another of Ashford’s corporate aims.

Training of fraud investigators

107 We were encouraged to note that three members of the VOT (including the SIO) began DWP sponsored Professionalism in Security (PINS) training during our on-site inspection. This training will help improve their knowledge of the legislative background to the prosecutions programme Ashford is pursuing. PINS training also covers observation techniques. It should also provide the necessary skills to improve the quality of investigations.

108 Staff commented that when training issues were identified in their personal development discussion, this training was always forthcoming. Staff have training logs, although there is no explicit training strategy to link personal development to ABS's priorities. We discuss training issues further in Appendix C.

Liaison with BFIS

109 The SIO’s background with BA and BFIS has helped working relations with these organisations. SLAs are signed annually by Ashford and BFIS. VOT representatives attend quarterly liaison meetings with BFIS.

110 Ashford recognises that joint working can provide mutual benefits, such as:

• learning from each other;
• economies of scale; and
• reducing the amount of fraud and error.

How does performance compare?

111 To judge the quality of a service it is important to compare the performance of that service against other suppliers across a range of sectors. The aim is not to make an exact comparison, but to explore how similar services (or elements of services) perform, in order to identify significant differences, the reasons for them, and the extent to which improvements are required.

112 We saw no evidence that Ashford had formally compared its counter-fraud performance with other providers. There was an intention to compare practices with the BFI Good Practice Guide. But evidence showed that a questionnaire had been created for this task in January, but had not been completed at the time of our inspection in July. Ashford told us that this exercise was delayed by staff changes. The target date for completion of this task has been extended to October 2001.

113 VOT representatives attend meetings of the Kent Investigation Officers Group, but we would also expect to see a commitment to seeking out best practice nationally.

114 We also seek to establish whether an LA has demonstrated cost-effectiveness. Ashford’s costs are comparatively high, as mentioned previously. We did not see explicit costing of the VOT so cannot comment further on this. Ashford has not demonstrated cost-effectiveness by subjecting ABS to external competition or by making sound comparisons which provide evidence that ABS is providing value for money. But we are aware that Ashford is now consulting external suppliers and has set a completion date for external competition of 2003.

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