BFI findings

Strategic Management

Fig. 2.1: Results of BFI’s assessment for Strategic Management

Source: BFI analysis
For an explanation about how to read this radar chart see Executive summary.

2.1 Benefits administration has to be set within the much broader context of a local authority’s overall strategies and responsibilities towards, for example, neighbourhood renewal, alleviating poverty, preventing homelessness, helping people into work and enhancing consumer choice.

The Vision

2.2 London Borough of Bromley was not at Standard in this element as it did not have a clear statement of intent endorsed by Members.

2.3 London Borough of Bromley had produced a Community plan. This document, produced in conjunction with a Local Strategic Partnership and dated April 2003, outlined its strategic plan from 2003 - 2015. The Local Strategic Partnership is made up of a wide range of public, private and voluntary sector organisations to inform strategic planning locally.

2.4 The Community plan set out London Borough of Bromley’s key priorities as agreed with its strategic partners. The Community plan specifically referred to HB in the context of its contribution to the alleviation of homelessness. It stated:

Our approach to homelessness will focus on prevention through the Housing Benefits Service and Housing Advice Services as well as providing additional accommodation.

2.5 London Borough of Bromley had produced a Mission Statement which set out its Vision of the high performing Benefits service that London Borough of Bromley aspired to provide:

Our mission is to provide a high quality, customer focused service, which aims to treat all customers with respect, sensitivity and flexibility.

The needs and views of our customers will be our first consideration in all aspects of our work.

We will design our services to provide quality, customer focused and efficient services, thereby reducing the level and risk of error and fraud.

We will deliver speedy, accurate services, which will provide advice, pro-actively recover all debts, investigate potential fraud and prosecute when required.

We will work with other teams and partners to assist in minimising the barriers to work and decent housing.

We will regularly review our services to ensure resources are provided to enable the services to perform at the highest levels.

The service is committed to achieving equality of opportunity in every area of its work. We seek to ensure discrimination does not occur on the grounds of gender, religion, disability, age, race, ethnic origin or sexual orientation.

We will work towards ensuring the service provides equal access for all our customers. Open and honest communication and consultation systems will keep customers, ourselves and our partners informed and involved and allow all our views to be taken into account.

2.6 There was no mention of the Mission Statement in the Community plan. Reference to the Mission Statement would provide HB managers and staff with a clear sense of direction and focus in relation to authority-wide strategic objectives.

2.7 The Mission Statement could be improved by a specific commitment to attain Performance Standards. To gain commitment throughout the organisation, it should be publicised to all HB staff and endorsed by Members.

 

Recommendations

We recommend that London Borough of Bromley:

· includes a specific reference to achieve Performance Standards in its Mission Statement · obtains Members’ endorsement for the Mission Statement · refers to the Mission Statement in its Community plan and Best Value Performance plan · communicates the Mission Statement to all HB staff.

Policy objectives

2.8 Authorities should support the strategic Vision with high level policies and clear objectives for the Benefits service. Together these should:

· eliminate the need for senior managers to make recurring or routine decisions

· provide a systematic way of delegating operational decisions in a manner that will sustain consistency of approach and equity of service

· be linked to its high level strategic and business plans.

2.9 London Borough of Bromley was not at Standard in this element as it did not:

· set high level objectives to meet, over time, the full range of Performance Standards

· ensure that Members annually endorsed all strategic policies and objectives

· review all strategic policies and objectives as part of its annual planning cycle.

2.10 London Borough of Bromley had a range of policies and strategies in place. Members annually reviewed performance against targets and agreed targets for the following year. Figure 2.2 lists some of the most relevant documents and comments on their status.

 

Fig. 2.2: Status of existing policies and strategies
Title	Status	Endorsed by Members	Dated	BFI Comments
Anti-Fraud and Corruption Strategy	Current	Yes	No	Held on London Borough of Bromley’s website. This was a comprehensive, council-wide document that set out clear definitions, incorporating legislative requirements, best practice and whistleblowing.
Benefit Fraud Prosecution Policy	Current	Yes	No	Included in Anti-Fraud and Corruption Strategy.
Verification	Current	No	09/7/03	London Borough of Bromley had a plan setting out actions to be taken to become Verification Framework compliant commencing in February 2004.
Quality Strategy	Current	Yes	03/9/03	This strategy set levels of quality checking and incremental targets to achieve an error rate of less than 5%.
Training Strategy	Required	No	-	London Borough of Bromley did not have a documented Training Strategy.
Take-up Strategy	Required	No	-	London Borough of Bromley did not have a documented strategy to encourage take-up.
Discretionary Housing Payments	Current	No	11/2/01	This gave procedural guidance but did not take into account the changes under the Discretionary Financial Assistance Regulations 2001.
Complaints	Current	Yes	No	The Getting it Right leaflet clearly outlined the complaints procedure and encouraged customer feedback. London Borough of Bromley’s website confirmed the complaints procedure outlined in the Getting it Right leaflet.
Overpayments Strategy	Current	Yes	23/9/03	A comprehensive document which referenced legislation, set standards and provided guidance. It included a plan to improve both prevention and recovery of overpayments.
IT Security Policy	Current	No	03/4/03	London Borough of Bromley had an IT Security Policy which set out the responsibilities of London Borough of Bromley’s managers for the security of its IT systems. The policy was based on the British Standard 7799 covering IT security.
Equal Opportunities Policy	Current	Yes	04/4/01	Clearly set out the Equal Opportunities Policy and documented key objectives.

Source: BFI Inspection

2.11 Although London Borough of Bromley had a number of strategies and policy documents, there were no direct links with its strategic Vision. In addition, there were no mechanisms in place to control the development and review of these strategies and policies. None of the policies or strategies contained any reference to achieving Performance Standards.

Recommendations

We recommend that London Borough of Bromley:

· sets specific objectives to meet, over time, the full range of Performance Standards · establishes a mechanism to review these strategic policies and objectives as part of its annual planning cycle · ensures that Members annually endorse all strategic policies and objectives · documents its policies in the areas of training and benefit take-up.

Operational planning

2.12 Operational planning ensures that resources are effectively managed and monitored to deliver service standards and performance targets.

2.13 London Borough of Bromley was not at Standard in this element because it did not:

· ensure change management plans recognised the impact on all stakeholders

· communicate its plans to all stakeholders

· have a comprehensive, documented and effective Business Continuity plan that covered responses to disruptions that had an impact on normal HB and CTB administration

· regularly test and review its Business Continuity and operational plans

· ensure all Benefits service and other associated staff were familiar with the contents of the Business Continuity and operational plans.

2.14 The Best Value Performance plan covering the period 2003 - 2006 stated the following as one of London Borough of Bromley’s objectives for 2003/04:

Exchequer and Benefits contracts to show significant improvements in benefits Key Performance Indicators.

2.15 Responsibility for HB sat within the Strategy and Resources portfolio. The Best Value Performance plan for 2003/04 outlined the need to produce detailed operational plans, identifying key tasks including:

· responsible individuals

· allocation of resources

· delivery timescales

· performance targets.

2.16 It also recognised the work required to make progress in the Benefits service:

The customer focus of Exchequer services and in particular Housing Benefits needs to be radically improved.

2.17 During our first inspection, London Borough of Bromley had a backlog of 8,421 items of post. In March 2003 it produced the HB Improvement plan detailing the actions required to clear its backlog. This plan included:

· a detailed breakdown of outstanding work

· an estimate of incoming work

· resources required to clear the backlog

· milestones to achieve Best Value Performance Indicators.

2.18 Following a reduction in the backlog, a number of additional plans were developed:

· Housing Benefits Post Backlog Actions and Projects (July 2003)

· Overpayments Strategy (September 2003)

· Quality Strategy (September 2003).

2.19 London Borough of Bromley also produced a plan to manage the implementation of the Verification Framework. This document, dated
9 July 2003, included:

· timescales and milestones for key events

· estimates of increased volumes of work

· estimates of increased resources requirements

· recruitment

· publicity

· visiting strategy.

2.20 London Borough of Bromley recognised there were advantages to adopting a methodical approach to planning. It produced a Service Improvement plan in October 2003, covering the whole of the HB operation. This high level plan detailed key areas of work, identified the ownership of each area of work and set out relevant implementation dates.

2.21 Although London Borough of Bromley had produced detailed plans which covered a number of areas, it had not performed any formal risk analysis. Plans were not always effectively communicated to staff. For example, some staff working in the Debt Recovery team were not aware of the existence of the Overpayments Strategy. London Borough of Bromley’s self-assessment recognised that plans did not always take account of the impact on all stakeholders.

2.22 London Borough of Bromley’s counter-fraud work was performed by London Borough of Greenwich Anti-Fraud team who also produced the counter-fraud plans. A formal Partnership Service Agreement supported this arrangement.

2.23 London Borough of Bromley’s Internal Audit section was responsible for the management of the Partnership Service Agreement. In addition to this, a service level agreement outlined the day-to-day working arrangements between the 2 parties.

2.24 London Borough of Bromley produced a Business Continuity report. This document illustrated that risks had been identified and contingencies put in place to react to potential problems. However, it was not clear from the report what specific action would be taken in the event of a disaster. Staff were not aware of the Business Continuity report or their individual roles in the event of a disaster. The maintenance procedure included a requirement to undertake testing of the Business Continuity plan during October 2003. These tests had not been performed.

Recommendations

We recommend that London Borough of Bromley:

· ensures change management plans recognise the impact on all stakeholders · communicates its plans to all stakeholders · revises its Business Continuity plan to cover responses to disruptions that impact on normal HB and CTB administration · regularly tests and reviews its Business Continuity and operational plans · ensures Benefits service and other associated staff are familiar with the contents of the Business Continuity and operational plans.

Performance targets

2.25 Performance targets underpin policy objectives and service standards and give staff a clear view of the desired outcome, and management clear accountability for providing effective and secure administration.

2.26 London Borough of Bromley was not at Standard in this element as it did not ensure that:

· managers and staff understood targets

· targets were reflected in individual work objectives.

2.27 London Borough of Bromley had adopted the Best Value Performance Indicator targets as the key measures of progress in the Benefits service. These targets were detailed in the Best Value Performance plan
2003 – 2006 and were also articulated in the HB Improvement plan and the subsequent Housing Benefits Post Backlog Actions and Projects plan.

2.28 London Borough of Bromley set targets that exceeded the upper quartile figures included in Performance Standards. For example, there were plans to exceed the 36-day new claims target by 2004/05. These targets are illustrated in Figure 2.3.

Fig. 2.3: London Borough of Bromley Best Value Performance Indicator targets
	2003/04	2004/05	2005/06
New claims processing (days)	45	32	32
Changes of circumstances (days)	25	7	7
Renewals %	65	85	85
Accuracy %	95	95	95
Overpayment recovery %	65	65	65

Source: London Borough of Bromley

2.29 Targets covering the volume of outstanding claims and customer services supplemented the Best Value Performance Indicators. These targets are shown in Figure 2.4.

Fig. 2.4: London Borough of Bromley’s Benefits service targets
	Target
Outstanding claims	Less than 1,500
Outstanding items of work	Less than 2,500
Callers	Seen within 10 minutes
Telephone calls	95% answered within 20 seconds

Source: London Borough of Bromley

2.30 Part of the contract, known as the Service Specification, with the Service Provider contained detailed targets for a wide range of HB processes.

2.31 More detailed assessment of targets set by London Borough of Bromley for the individual aspects of its benefits work are contained in the relevant sections of this report.

2.32 London Borough of Bromley did not effectively communicate targets to staff responsible for delivery. For example, Benefit Assessors were not aware of the 36-day Performance Standard. Benefit Assessors worked to the separate 14-day target that measured the time from the date all information was available to the date of the decision. London Borough of Bromley recognised this and had plans in place to communicate targets more effectively.

2.33 Benefit Assessors were given information about ongoing performance. Information about processing times and outstanding work was displayed throughout their offices and was available on the intranet.

2.34 Benefits service staff work objectives did not specifically include the Best Value performance targets.

Performance monitoring

2.35 Performance monitoring provides assurance to Members and senior officers that HB and CTB administration is effective and secure. It is important that Members and senior officers receive reports on performance against the Vision, objectives and plans to make the accountability process transparent. Performance monitoring can also encourage the development of a culture of continuous improvement.

2.36 London Borough of Bromley was at Standard in this element. Its meeting and reporting structure provided assurance to Members and senior officers on the performance of the Benefits service. This structure is set out in Figure 2.5.

Fig. 2.5: London Borough of Bromley’s meeting and reporting structure

Source: London Borough of Bromley

2.37 The Housing Benefits Group Leader, who was responsible for managing the Benefits service liaised with the client-side Benefits Manager on a daily basis.

2.38 The Service Provider submitted monthly monitoring reports to the
client-side detailing:

· caseloads

· end-to-end processing times for new claims

· end-to-end processing times for changes of circumstances

· % of renewal claims decided before the end of the benefit period

· % of new claims processed in 14 days

· % of renewal claims processed in 14 days

· number of new and renewal claims assessed

· total work outstanding

· number of complaints

· customer waiting times

· incoming post

· telephone calls received, answered and abandoned

· number of e-benefit claims processed.

2.39 A summary of this report was prepared for the 4-weekly Strategic Management Board meeting, attended by the Director of Resources, the Assistant Director of Resources and the Service Provider’s Business Centre Director.

2.40 A quarterly report was provided by the Assistant Director of Resources to the Strategy and Resources portfolio meeting which was chaired by the Leader of the council. This report covered:

· outstanding work

· performance against Best Value Performance Indicators

· assessment accuracy

· number of complaints

· monetary value of all outstanding overpayments

· volume of calls received, answered and abandoned at the Call Centre

· progress against Verification Framework plans.

2.41 The performance of the London Borough of Greenwich Anti-Fraud team was monitored by reports every 4 months to the Audit subcommittee. These reports detailed Security Against Fraud and Error rewards and the number of:

· referrals

· referrals received from the hotline

· ongoing investigations

· interviews without caution

· interviews under caution

· fraud visits

· sanctions.

2.42 London Borough of Bromley had a logical structure of meetings, providing the correct level of data to effectively monitor the performance of the Benefits service.

Organisational structure

2.43 It is important that human and other resources are used to provide an effective Benefits service. Organisational design will be influenced by
council-wide policy on issues such as:

· service centralisation or decentralisation

· outsourcing

· the size and geography of the local authority

· the siting of HB and counter-fraud work within Finance or Housing, or a combination within these or other departments.

2.44 The organisational structure adopted should not have an adverse impact on the administration of HB. The Institute of Revenues, Rating and Valuation recommends that the HB Manager should occupy a senior position within the authority with a direct reporting line to the Section 151 Officer.

2.45 London Borough of Bromley was at Standard in this element. The Benefits service had a dedicated Benefits Manager post, with 51 processing staff.

2.46 London Borough of Bromley’s Benefits service was managed within the Resources Directorate. London Borough of Bromley provided us with organisation charts to illustrate the roles and responsibilities of Benefits service staff. Figure 2.6 sets out the organisational structure for the client-side and Figure 2.7 shows the Service Provider structure.

Fig. 2.6: Client-side organisational structure

Source: London Borough of Bromley

Fig. 2.7: Service Provider organisational structure

Source: London Borough of Bromley

2.47 The Service Provider also delivered the Council Tax collection service managed by a Revenues manager reporting to the Business Centre Director. This shared management structure allowed for liaison between the Council Tax and Benefits service departments.

2.48 Benefit Assessors were assigned to work alongside the Homeless Persons’ Unit. This initiative provided close operational liaison between the Benefits service and the Homeless Persons’ Unit.

2.49 London Borough of Bromley advised us that it was considering moving the recovery of overpayments to the Benefits service. It felt that closer links with HB would improve the recovery of overpayments.

Procedural guidance

2.50 HB and CTB are important components of the national benefits system and it is important that staff and managers responsible for their administration are supported and guided by good procedures.

2.51 London Borough of Bromley was not at Standard in this element as it did not have:

· procedures that provided an accurate, up-to-date guide to local practices within the authority

· a mechanism to ensure that practitioners and managers understood procedures

· a formal management control process for developing and changing local procedures.

2.52 However, London Borough of Bromley had an intranet that contained a wide range of procedural guidance and information. An index helped staff locate guidance on specific subjects. This was available to all Benefit Assessors and included:

· HB circulars

· the Department’s guidance

· Benefit IT system screen guidance

· HB rates

· guidance on tax credits

· HB Regulations

· London Borough of Bromley’s procedures.

2.53 The guidance could have been more comprehensive and accurate. For example, it did not have information on how to assess HB claims from
self-employed customers and there were 2 conflicting and undated guidance documents covering benefit periods.

Recommendations

We recommend that London Borough of Bromley ensures:

· all its procedures are available on its intranet · that a formal management process is in place to update procedural guidance regularly so that only current guidance is held on the system · staff understand the guidance provided.

Management assurance

2.54 Members and senior managers, who are accountable for the delivery of a secure and effective HB and CTB administration, need regular and systematic assurance that the Benefits service and counter-fraud efforts are working as planned.

2.55 London Borough of Bromley was at Standard in this element and met 2 of the 3 above Standard components.

2.56 London Borough of Bromley devoted significant resources to management checking in response to the accuracy problems identified through its management reporting mechanisms.

2.57 In our first inspection we found that London Borough of Bromley’s management checking regime was weak as there was an over-reliance on the client-side determination team to ensure the accuracy of payments through the determination process.

2.58 During our current inspection we found that there were 2 levels of checks on benefits work. The Service Provider’s Quality Assessors performed a 10% check on all claims assessed and carried out additional checks on:

· new staff

· returned cheques

· payments exceeding £1,000.

2.59 London Borough of Bromley’s Determinations team checked at least 10% of claims assessed, plus additional checks on high-risk claims, for example payments over £1,000.

2.60 There were plans to transfer accuracy checking to the Service Provider once accuracy levels reached 93%. Following the on-site phase of our inspection, London Borough of Bromley advised us that this work had been passed to the Service Provider in January 2004 as accuracy had reached 95%. However, London Borough of Bromley planned to continue checking 10% of worked performed by the Service Provider.

2.61 Checking results were reported to senior managers as part of the monthly monitoring report.

2.62 The Housing Benefits Group Leader was responsible for implementing the Quality Strategy which included analysing checks to identify common errors. This information was used to focus training on improving the accuracy of assessments.

2.63 Figure 2.8 shows the financial and administrative error rate had been steadily improving. Although the October 2003 figure did not conform to the trend, accuracy improved to 89% during November 2003.

Fig. 2.8: Assessment error rate from July 2003 - November 2003 (includes financial and administrative errors)

Source: BFI analysis

Management information

2.64 Management information provides a sound base for managers to evaluate the effectiveness and security of the Benefit IT system and is a useful tool for management to make informed decisions on the day-to-day running of their sections and to keep Members informed of performance. It should not only be used to generate a local authority’s performance indicators.

2.65 London Borough of Bromley was not at Standard in this element as it did not use management information to establish areas of low benefit take-up.

2.66 London Borough of Bromley had good systems in place to collect accurate management information. Regular reports were produced giving details of performance across a range of areas including:

· clearance times and volumes of claims from the Benefit IT system

· the breakdown of outstanding work from the Document Management system

· speed of call answering from the telephone system

· number of complaints from the complaints database

· waiting times from the customer service queuing system.

2.67 London Borough of Bromley used its management information to identify trends. For example, the HB Improvement plan detailed total work outstanding by type and estimated the approximate weekly incoming work, based on historical data. This information was used to estimate the resources required to successfully reduce the backlog of work.

2.68 The Strategic Management Board meetings regularly reviewed management information to establish performance against plans.

2.69 London Borough of Bromley regularly reviewed management information to establish work priorities and concentrated resources on clearance of the backlog. For example, a decision to retain temporary staff, rather than release them as planned, was made during 2003 based on outstanding workload figures.

2.70 We report in the Customer Services section of this report that London Borough of Bromley had not taken any steps to promote benefit take-up.

Recommendations

We recommend that London Borough of Bromley analyses available management information to establish areas of low benefit take-up.

Training and development

2.71 Effective and secure delivery of HB and CTB depends on staff performance. The administration of these benefits is complex and staff retention and recruitment are major issues for managers. Local authorities should offer effective training, career and personal development activities.

2.72 Investment in the training and development of staff, plays a key role in:

· attracting new recruits

· retaining staff

· offering a career path for potential managers

· developing the management skills of more senior staff.

2.73 Investment in performance management can:

· bring greater consistency and fairness to the management of staff

· highlight where individuals need to develop or improve performance

· ensure that career advancement is based on demonstrable delivery of results and competence to take on greater responsibility.

2.74 London Borough of Bromley was not at Standard in this element as it did not:

· have a training plan

· operate a training programme for all HB and CTB staff, including training for new and existing staff in all key areas of benefits delivery

· use training evaluations to review and revise training programmes

· ensure new entrant induction and ongoing training was based on the Department’s model training plans

· ensure that Benefit Assessors’ job descriptions properly reflected the work the jobholders actually performed and personal work objectives reflected corporate objectives

· provide specific, measurable, achievable, relevant and time-based work objectives.

2.75 London Borough of Bromley had a formal induction programme for new staff. New Benefit Assessors were given classroom training covering simple assessment work. This was followed with processing live work to consolidate training before undertaking further classroom training in more complex work. This process covered the full range of assessment duties.

2.76 Customer Service Advisers and Debt Recovery staff had not received any formal training. Although Customer Service Advisers were kept up-to-date through the weekly Wednesday training sessions. The approach to training staff at London Borough of Bromley was inconsistent. The introduction of a corporate training plan and a training needs analysis would help to ensure that all staff received adequate training.

2.77 Changes to benefit rules were communicated to staff by locally tailored training sessions, supplemented by HB circulars and locally produced guidance placed on the intranet. For example, changes due to the introduction of tax credits.

2.78 All counter-fraud staff had either qualified or were working towards completing the relevant modules of the Professionalism in Security investigation qualification.

2.79 We examined job descriptions covering staff from both London Borough of Bromley and the Service Provider. In both areas the job descriptions contained vague responsibilities. For example the job description for the Benefits Monitoring Officer included:

To have a general knowledge of social security and HB and CTB.

2.80 Performance Standards require authorities to provide objectives that are:

· specific

· measurable

· achievable

· relevant

· time-based.

2.81 The job descriptions did not provide sufficiently concise objectives to meet this requirement. We were provided with a document setting out Benefit Assessors’ objectives. This document highlighted, in broad terms, the requirements of these staff. However, Benefit Assessors were unaware of any specific objectives.

2.82 The Service Provider’s staff were given monthly feedback about their performance, by their line manager. Formal appraisals were carried out on an annual basis, supplemented by a 6-monthly review. This review met the requirements of Performance Standards but the absence of any specific key work objectives severely compromised the value of the appraisal system.

Recommendations

We recommend that London Borough of Bromley:

· develops a training plan · operates a training programme for all Benefits service staff, covering all key areas of HB delivery · evaluates training and uses these evaluations to review and revise training programmes · ensures that job descriptions properly reflect the work of the jobholders and that personal work objectives reflect corporate objectives · provides specific, measurable, achievable, relevant and time-based work objectives.

IT

2.83 The most should be made of available IT to support an effective and secure HB and CTB administration, and the technology deployed should assist the local authority in making progress against the e-government agenda.

2.84 Automation of processes should enable greater efficiency. Reliable and timely management information should be used to monitor performance and inform management decisions.

2.85 London Borough of Bromley was not at Standard in this element because it did not regularly assess the integrity and security of its IT systems.

2.86 During our previous inspection we made a number of recommendations regarding IT security. All the recommendations had been implemented except London Borough of Bromley had not set up a process to regularly review user access levels.

2.87 There were some strengths including the existence of an IT Security Policy and an Operational Service Agreement between London Borough of Bromley and the Service Provider that covered specific IT aspects, including the protection of information.

2.88 An external auditor conducted a review of the IT control environment in accordance with the Audit Commission’s Code of Audit Practice in April 2003. It found that a formalised disaster recovery plan needed to be put in place as a matter of urgency. This had not been done by November 2003.

2.89 Figure 2.9 provides details of London Borough of Bromley’s compliance with access control good practice.

Fig. 2.9: Summary of London Borough of Bromley’s compliance with access control good practice
Good Practice	Met by local authority? Yes/No/Partial	BFI comment
Access control policy
Requirements for user access to systems should be defined and documented	Y	Requirements for user access were defined and documented in the Systems Access policy. Requests for user access to the Benefit IT system were made by the line manager on a standard form.
User registration
System users should be registered in accordance with their system access needs and deregistered when access is no longer required	Y	New users’ system access needs were determined and controlled by individual line managers. Systems scans were run daily to identify users who had not changed their passwords for 40 days. These accounts were de-activated.
Privilege management
Some system privileges may allow users to override system controls and so they must be identified, allocated and authorised on a need-to-use basis	Y	User privileges were authorised by line managers and the Control Section. Benefit staff did not have user privileges to override system controls.
Review of user access rights
Users access capabilities (including privileges) should be regularly reviewed	N	There was no process in place to review user access levels.
User password management
Allocation of user passwords should be controlled by a formal management process	Y	There was a process in place to control user passwords.
Password use
Users should be advised to follow good practice in selection and use of passwords	Y	A written policy on system security and use of passwords was provided to all staff at induction.
Unattended equipment
Unattended equipment should be protected from unauthorised access or usage. For example, active sessions should be terminated unless they can be controlled by a system lock or time-out	Y	Unauthorised access to the Benefit IT and Document Management systems was prevented by users locking their workstation. Active sessions were terminated after 15 minutes by a system lock.

Good Practice	Met by local authority? Yes/No/Partial	BFI comment
User identifiers
All computer activities should be traceable to individuals	Y	Each system access could be traced to an individual on system audit trails.

Source: London Borough of Bromley and BFI analysis

 

2.90 London Borough of Bromley successfully introduced an e-benefit claim form. This initiative was designed to speed up the new claims process. At the time of our second inspection, London Borough of Bromley had processed over 200 e-benefit claims and achieved an average end-to-end clearance time of under 9 days for these types of claims. London Borough of Bromley was working with local housing associations to expand the use of this initiative.

2.91 London Borough of Bromley had an IT Security Policy which set out the responsibilities of managers for the security of its IT systems. The policy was based on the British Standard 7799 covering IT security.

2.92 The policy was a high level document identifying accountability for security measures. It included a Security Issues document which provided details of security measures required and was intended for use by IT developers, project managers and IT system owners.

2.93 The IT Security Policy assigned responsibility to chief officers for disaster recovery planning and testing. However, there were no documented IT disaster recovery plans in place.

2.94 A separate system operated by the Anti-Fraud team, based at London Borough of Greenwich, provided the support to manage fraud investigations. We found the same level of assurance regarding the systems used by the Anti-Fraud team.

Recommendations

We recommend that London Borough of Bromley sets up a process to regularly review user access levels and take appropriate action.

Internal Audit

2.95 Internal Audit provides assurance to management and Members about the effectiveness and security of HB and CTB administration.

2.96 Internal Audit plays a critical role in ensuring that the internal control environment is in place. As such, Internal Audit helps to form part of the broader governance arrangements for the authority by providing assurance to both management and Members that policies and operations are in place to:

· identify, assess and manage risks

· safeguard the organisation’s assets and interests from all losses

· ensure economical, effective and efficient use of resources

· ensure integrity and reliability of information.

2.97 London Borough of Bromley maintained an Internal Audit section within the Resources Directorate. The Internal Audit Strategic plan stated that its aim was:

to provide an adequate and effective internal audit of the accounting records and control systems of the authority.

2.98 The strategic plan stated that internal audits of the Benefits service were designed to:

test that the authority has adequate controls surrounding the Housing Benefit and Council Tax Benefit systems to ensure that all eligible customers are paid the right amount and on time.

2.99 London Borough of Bromley was not at Standard in this element because Internal Audit plans did not involve assessing performance against Performance Standards. We were advised that plans to do this were in place.

2.100 However, it met 6 out of the 7 components for the element of Internal Audit.

2.101 Internal Audit had many areas of good practice and it had a programme of work that included a clear rolling programme which:

· was agreed by Members

· extended over a 5-year period

· focused on risks to security and failures in effectiveness.

2.102 The 5-year programme for Internal Audit was reviewed annually and updated to incorporate changes identified during the previous year. Internal Audit coverage was assessed using a comprehensive, structured risk assessment process taking various elements into account including:

· expenditure

· people

· finances

· volume of transactions

· internal controls

· infrastructure stability

· sensitivity.

2.103 Using this risk assessment the Benefits service was assessed as ‘very high’ risk and, as such, was audited on an annual basis.

2.104 The Resources Directorate, which included the Benefits service, was allocated a higher percentage of the total available Internal Audit days than any other department for each year from 2003/04 - 2007/08. In 2003/04 the Resources Directorate was allocated 22% of the total audit days.

2.105 Figure 2.10 shows the number of planned Internal Audit days for areas related to HB and CTB.

Fig. 2.10: Planned Internal Audit days for HB, CTB and counter-fraud from 2003/04 - 2007/08
Audit area	2003/04	2004/05	2005/06	2006/07	2007/08
HB	55	60	60	55	60
CTB	20	20	20	20	20
Fraud Partnership	5	5	5	5	5
National Fraud Initiative	20	25	20	25	20
Fraud contract management	40	40	40	40	40

Source: London Borough of Bromley

2.106 The results of each audit were formally reported to management. Each audit had agreed terms of reference and was conducted in accordance with the Chartered Institute of Public Finance Accountants’ audit code of practice and London Borough of Bromley’s standard audit documentation guidance. All final reports were agreed with the area being audited prior to release and were systematically followed up.

2.107 The priorities for recommendations included within each report were identified as set out in Figure 2.11.

Fig. 2.11: Definition of priorities in Internal Audit reports
Priority	Action to be taken
Priority 1	Required to address major weaknesses and should be implemented as soon as possible.
Priority 2	Required to address issues which do not represent good practice.
Priority 3	Identification of other suggested areas for improvement.

Source: London Borough of Bromley

2.108 The manager of the audited area received a formal report setting out detailed findings. Each recommendation included:

· the associated risk to the business if the required controls were not put in place

· comments from the relevant manager detailing any action in progress

· the name of the officer responsible for taking the recommendation forward

· agreed timescales for actions

· whether or not the issue had been raised in a previous audit

· the priority assigned to the recommendation or problem.

2.109 Reports were submitted to the Audit subcommittee on a quarterly basis in the form of a summary progress report. Progress was reported on all Priority 1 recommendations. Any recommendations given either a Priority 2 or 3 rating were followed up during the next audit. This arrangement allowed Members to concentrate on the issues most likely to affect the security and efficiency of the authority.

2.110 In addition to this, Members selected a number of documents across all audited areas for random checking.

2.111 At the March 2003 Audit subcommittee, Members selected 3 HB documents and examined these to ensure that:

· details were correctly taken from the claim form

· details were correctly entered on the Benefit IT system

· payment was made correctly

· payments could be traced through to the general ledger

· the claim was processed without delay

· payments on account were made in appropriate cases

· there was a clear audit trail including date stamping.

2.112 The audit carried out in September 2003 found 3 Priority 1 issues and a number of Priority 2 and 3 issues that had been carried over from the previous audit. These are set out in Figure 2.12.

Fig. 2.12: London Borough of Bromley’s response to previous high priority Internal Audit recommendations
Recommendation	Priority	Management response	BFI observation
Payments on account are not being made where appropriate	Priority 1	Payments on account policy explaining the occasions when they should be made is now operational. Monitoring on new working practices to be undertaken.	A dedicated member of staff was responsible for making payments on account in each team. New claims were not monitored to ensure that payments on account were made in all appropriate cases.
Overpayments are generally not calculated to take into account the underlying entitlement during the overpayment period	Priority 1	Reminder to be sent to all staff about calculation of underlying entitlement.	Customers were invited to claim underlying entitlement.
Outstanding claims and correspondence are having an adverse impact on the progress of recovery action for many overpayments	Priority 1	Backlog of claims and correspondence has been cleared. Outstanding work is below the equivalent of 2 weeks incoming post.	There were 2,092 cases awaiting action by Benefit Assessors before recovery action could commence.

Recommendation	Priority	Management response	BFI observation
Screen prints should be taken of the parameters once they have been agreed and these should be signed off as agreed between the Service Provider and the Benefits Monitoring Officers	Priority 2 *	Screen prints are taken when parameters are changed and signed off.	This had been cleared.
Forms should be date stamped on receipt	Priority 3 *	A reminder will be sent to staff.	Date stamping remained a problem.
Documents should be date stamped and signed original seen		As above.	In 7% of cases sampled copies of original documents were not stamped to show that the original had been seen.
Tenancy agreements should be held on file		As above.	Tenancy agreements were held on file.
Landlord details should be recorded on Benefit IT system	Priority 3 *	Landlord details are held on the Benefit IT system when they are in receipt of direct payment. This will be extended to all claims when the Verification Framework is implemented.	Landlord details were recorded on the Benefit IT system when in receipt of direct payments. Plans were in place to extend this to all claims following the introduction of the Verification Framework.
Cheques should be investigated if they remain unpresented for more than 3 months. Claims should be suspended while enquiries are made	Priority 2 *	Working practices will be changed to ensure that cheques are investigated where they remain unpresented for 6 months.	There were procedures in place to investigate unpresented cheques promptly, however, London Borough of Bromley accepted that they could be improved.

Source: London Borough of Bromley and BFI analysis

* Raised in previous audits

Recommendations

We recommend that London Borough of Bromley ensures that internal audits focus on assessing performance against Performance Standards.

External Audit

2.113 External Audit has a statutory responsibility to review and report on the arrangements that the local authority has put in place to secure economy, efficiency and effectiveness in its use of resources. It also gives independent assurance on matters related to the accounts and reports on the arrangements to secure propriety. Local authorities must act on this independent advice and assurance, while having their own systems of assurance. They cannot rely on External Audit identifying faults.

2.114 London Borough of Bromley was at Standard in this element.

2.115 The Audit Commission Supplier took on the provision of external audit work for London Borough of Bromley in March 2003. There was an effective working relationship between external and internal auditors. The Audit Commission Supplier operated under a managed audit approach.

2.116 As part of this, the Audit Commission Supplier relied on the work of Internal Audit wherever possible. We saw a document defining the areas of co-operation between the Audit Commission Supplier and the Internal Audit function at London Borough of Bromley. The Audit Commission Supplier and Internal Audit met monthly to facilitate the sharing of information and ideas on how to make the managed audit process work best for both parties.

2.117 On receipt of External Audit reports London Borough of Bromley prepared an action plan in response to the findings. The Audit Commission Supplier and Internal Audit attended the Audit subcommittee and submitted individual progress reports for consideration by the members of that subcommittee.

Compliance with the Race Relations Act

2.118 The Race Relations Act 1976 was amended in 2000 to impose a number of duties on all public authorities. Councils are required to fulfil:

· the General Duty to eliminate unlawful discrimination and to promote equality of opportunity and good relations between persons of different racial groups

· the Specific Duty to publish, by 31 May 2002, a race equality scheme that sets out the arrangements it has made to satisfy this General Duty

· the Specific Duty as an employer to provide the tools to ensure that it satisfies the General Duty in all aspects of its work.

2.119 It is important to note that the arrangements set out in the scheme must cover every area within the public body. Each area must then satisfy those requirements within each of the duties that are relevant to them if the authority, as a whole, is to conform to the legislation.

2.120 What is expected of every local authority is set out in the Commission for Racial Equality’s non-statutory document The duty to promote race equality – a guide for public authorities. Response to the Act is proportionate, in that those organisations with larger ethnic populations are required to do more than those with smaller ethnic populations. In the 2001 census London Borough of Bromley’s ethnic population was 8%.

2.121 London Borough of Bromley was not at Standard in this element as it did not:

· comply with its statutory obligations under the Race Relations (Amendment) Act 2000

· actively communicate its race equality scheme to staff

· support its race equality scheme with a 3-year action plan

· provide general training to Benefits service staff on the Race Relations (Amendment) Act 2000

· provide cultural awareness to Benefits service staff aimed at promoting racial equality

· conduct an annual review on all the facilities provided for customers of key ethnic minority groups in the area.

2.122 London Borough of Bromley had produced a race equality scheme. This document outlined:

· the requirements of the Race Relations (Amendment) Act 2000

· the arrangements to monitor staff by reference to racial groups

· that the Leader’s portfolio would have responsibility for values including fairness.

2.123 London Borough of Bromley’s race equality scheme included impact assessments on relevant functions required by the Act. These functions had been reviewed to:

· eliminate unlawful racial discrimination

· promote equality of opportunity

· promote good race relations between people of different racial groups.

2.124 These assessments were set out in the appendices to the scheme. The appendices included assessments for:

· Leisure and Community Services

· Environmental Services

· Social Services and Housing.

2.125 No assessment of the Benefits service appeared in the race equality scheme.

2.126 London Borough of Bromley’s race equality scheme stated:

The council will publish this Race Equalities Scheme (in hard copy and electronically) and will ensure it is distributed to interested parties.

2.127 We would have expected the race equality scheme to be available on London Borough of Bromley’s website. When we searched the site, in December 2003, we were unable to find the race equality scheme.

2.128 London Borough of Bromley had not:

· reviewed the policies in the Benefits service to see if any of them had an impact on race equality

· identified and proactively encouraged benefit take-up in areas where customers may be disadvantaged

· promoted good relations between people of different racial groups through cultural awareness and race relations training for Benefit Assessors.

2.129 The Commission for Racial Equality produced guidance for local government to assist local authorities to progress their race equality schemes. There are 5 levels of Commission for Racial Equality auditing guidance. Level 5 was the highest level. The guidance provided prompts to assess the improvement in racial equality against 6 areas:

· policy and planning

· service delivery and customer care

· community development

· employment, recruitment and retention

· employment, development and retaining staff

· marketing and corporate image.

2.130 London Borough of Bromley provided us with an Equalities Action plan. This document was not dated. The plan covered all of the Exchequer services including the Benefits service. The aim of the action plan was to ensure that the service achieved level 2 against the Commission for Racial Equality guidance.

2.131 The plan included:

· production of a written service commitment

· monitoring of benefit take-up

· identification of available services, for example translation services

· review of the complaints procedure

· allocation of responsibilities

· training

· review of the Service Specification.

2.132 The plan did not cover a 3-year period as required by Standards. London Borough of Bromley accepted that there had been little progress on the issues identified in the plan and that further work was required to take this forward.

Recommendations

We recommend that London Borough of Bromley: · actively communicates its race equality scheme to staff · provides general training to HB and CTB staff on the Race Relations (Amendment) Act 2000 · provides cultural awareness training to all Benefits service staff aimed at promoting racial equality · conducts an annual review on all the facilities provided for customers of key ethnic minority groups in the area

We recommend that London Borough of Bromley:

· produces a 3-year action plan to: - assess policies - consult with relevant groups - monitor policies - analyse benefit take-up - publish monitoring results - seek feedback on monitoring - train staff - review the race equality scheme.

Internal working arrangements

2.133 Local authorities need to manage their internal partnerships and relationships to support policy objectives. Such management includes ensuring that common goals are set for an effective and secure HB and CTB administration.

2.134 London Borough of Bromley was not at Standard in this element as it did not publish the results of regular monitoring and reviews of internal working arrangements, modifying them as necessary.

2.135 London Borough of Bromley had effective mechanisms in place to liaise with internal stakeholders. Regular liaison meetings were held with Social Services staff, although minutes of these meetings were not taken.

2.136 Regular meetings were held with staff in the Homeless Persons’ Unit. A new initiative had been introduced locating Benefit Assessors in the Homeless Persons’ Unit to provide a better service for vulnerable customers and to improve liaison. This initiative was in the early stages of development but feedback from the Homeless Persons’ Unit indicated that improvements had been noticed.

2.137 The performance of the Benefits service in relation to alleviating homelessness was reported and formally monitored by Members through quarterly reports to the Social Care, Health and Housing portfolio holder.

2.138 Performance against the Service Specification was reviewed at the monthly Heads of Division meetings. We examined minutes of these meetings and confirmed that issues of mutual interest, for example the impact of tax credits on the Benefits service and progress on clearance of the backlog, were discussed.

 

Recommendations

We recommend that London Borough of Bromley:

· improves its internal liaison by ensuring that minutes are taken and conducting an annual evaluation to ensure that internal liaison mechanisms are operating effectively

· publishes the results of the regular monitoring of internal working arrangements, modifying them as necessary.

External working arrangements

2.139 Local authorities function within their own network of relationships with customers, stakeholders and other bodies in their communities. Effective partnerships with these organisations will provide mutual benefits through savings in administrative costs and benefit expenditure and reduce the amount of fraud and error. Some stakeholders such as the Rent Service and Jobcentre Plus play a key part in handling HB and CTB claims effectively and securely.

2.140 London Borough of Bromley was not at Standard in this element as it did not:

· monitor and review all its service level agreements at least annually, with action taken to improve effectiveness and security as indicated by the monitoring reports

· have formalised, agreed and documented working arrangements with other organisations, such as registered social landlords and Citizens Advice to ensure that service delivery remained effective.

2.141 London Borough of Bromley had service level agreements in place with:

· Counter-Fraud Investigation Service

· The Pension Service

· Jobcentre Plus.

2.142 We examined these agreements and found they were based on the national models.

2.143 London Borough of Bromley also had a draft service level agreement in place with the Rent Service. This agreement had not been signed. We discuss the relationship with the Rent Service and how this could be improved in the Processing of Claims section of this report.

2.144 Counter-Fraud Investigation Service liaison is covered in detail in the Counter-Fraud section of this report.

2.145 London Borough of Bromley had attended 2 meetings with The Pension Service arranged by the Association of London Government. The first meeting included the signing of a service level agreement. The meeting on
14 January 2003 was about setting up joint visiting teams.

2.146 In our first report we recommended that London Borough of Bromley complied with the requirements of the service level agreement with the then, Benefits Agency, monitored performance against the standards set down and ensured that a nominated liaison officer attended the quarterly liaison meetings.

2.147 During our second inspection quarterly meetings were held with Kent Jobcentre Plus District. The most recent meeting was on 12 November 2003. London Borough of Bromley had a nominated officer who attended these meetings.

2.148 London Borough of Bromley also attended quarterly meetings with the Jobcentre Plus Benefit Centre in Makerfield. As a result of a meeting last year, staff were given training on accessing additional information from the Remote Access Terminal.

2.149 Although all the signed service level agreements provided for monitoring, London Borough of Bromley had not performed any documented monitoring against these agreements.

2.150 It is essential that London Borough of Bromley is notified of changes to IS or JSA(IB) entitlement, which will affect HB and CTB claims. To ensure that the relevant cases are identified by the IS and JSA computer systems an indicator needs to be set by Jobcentre Plus staff on the relevant claim record.

2.151 In our first report we recommended that London Borough of Bromley checked the setting of the HB and CTB indicators for all new and renewal claims and passed this information on to the Benefits Agency to ensure errors were corrected.

2.152 London Borough of Bromley told us it had instructed Remote Access Terminal operators to check for the HB indicator and send a notification to Jobcentre Plus in cases where the indicator was not set. Without monitoring, London Borough of Bromley had no assurance that changes reported to Jobcentre Plus would lead to automatic notification. This could lead to overpayments of benefit.

2.153 London Borough of Bromley had not agreed a Business Partnership Agreement with the Inland Revenue regarding the delivery of tax credits.

2.154 We report in the Working with Landlords section of this report on the good liaison with registered social landlords. However, there were no documented service level agreements with them setting out the standards of information exchange and liaison.

2.155 Liaison meetings were held with the local Citizens Advice but these were not minuted.

Recommendations

We recommend that London Borough of Bromley:

· agrees a Business Partnership Agreement with the Inland Revenue to clarify roles related to delivery of benefit to tax credit customers · monitors and reviews all its service level agreements at least annually and takes action to improve effectiveness and security as indicated by the monitoring reports · documents and agree minutes of meetings with Citizens Advice.

Contractors

2.156 A local authority may choose to outsource aspects of its HB and CTB administration to a Service Provider, and the principles of Best Value requires it to consider the potential benefits of doing so. In some ways this may provide a more efficient service, but there is a risk that the Service Provider operates a service that is ineffective and insecure.

2.157 London Borough of Bromley was at Standard in this element.

2.158 London Borough of Bromley originally contracted-out its Benefits service in 1993 under the voluntary competitive tendering arrangements. The contract was awarded for 5 years, but was extended in July 1996, for a further 4 years. This contract expired at the end of March 2002.

2.159 Because of the value of the contract, London Borough of Bromley correctly re-tendered its Benefits service by placing an invitation to negotiate in the Official Journal of the European Community dated 20 March 2001.

2.160 Tenders were invited from 10 suppliers who had expressed an interest in bidding. A formal bid was put forward by 4 of these companies.

2.161 An evaluation team considered the bids against set criteria and a report was made to the Property and Finance subcommittee on 24 October 2001. This report outlined the details of the bids made and sought Members’ agreement to the selection of a preferred supplier and the cost of the contracts, subject to final negotiations.

2.162 A 7-year contract was awarded to a single Service Provider in
April 2002.

2.163 In our first report we made some criticisms regarding omissions in the 1993 contract. We examined the 2002 contract to identify if these omissions had been addressed in the revised contract. Figure 2.13 illustrates our findings.

 

Fig. 2.13: Comparison of original and revised contracts
Recommended good practice	Covered in 1993 contract Yes/No/Partial	Covered in 2002 contract Yes/No/Partial	Comment
Ensure price proposals are related to achievement of contract conditions	P	Y	Schedule 17 of the contract specified procedure for claiming liquidated damages.
Ensure continuity of service	N	Y	Section 34 of the contract required the Service Provider to draw up and maintain a Business Continuity plan.
Ensure staff conflicts of interests and vetting are covered	N	P	Section 31.10 of the contract covered vetting, but did not address staff conflicts of interest.
Ensure coverage of security measures and data protection issues	N	Y	Section 15.6 of the contract covered data protection obligations.
Protect access rights for audit purposes including the establishment of a credible Internal Audit function	N	Y	Schedule 13 of the contract covered audit and inspection rights.
Clear meeting arrangements with the Service Provider	P	Y	Section 12 of the contract defined the requirements for meetings with the authority.
Establish sufficient and expert monitoring arrangements to ensure legal requirements are met	P	Not Applicable	The legal requirement for authorities to determine all claims had changed since our first inspection.
Establish effective monitoring arrangements and the enforcement of liquidated damages	P	Y	Section 12 of the contract covered review of performance against service levels and agreed remedial action.

Source: BFI analysis

2.164 The revised contract was a significant improvement on the earlier contract. It contained the provision to negotiate incentives where necessary and to impose liquidated damages if targets were not achieved.

2.165 London Borough of Bromley had a partnership approach to managing the contract. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX

2.166 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X XXXX XXX

2.167 In our first report we recommended that London Borough of Bromley reviewed the make-up of its client-side to ensure it had appropriate staffing to monitor the contract effectively and carry out its determinations accurately and promptly.

2.168 Since our first inspection the regulations requiring the determination of claims by authorities changed. This meant that London Borough of Bromley was no longer required to decide benefit claims using its own staff and could delegate the task to its Service Provider. However, London Borough of Bromley remained responsible for ensuring that this function was carried out correctly.

2.169 Since our first inspection London Borough of Bromley had strengthened its client-side team by recruiting an experienced Head of Benefits. This officer was supported by the Benefits Manager, the Senior Monitoring Officer and 4 Monitoring Officers. The revised client-side organisation had the necessary number of experienced staff to provide effective monitoring of the contract.

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