Executive summary
Background
1.1 The role of the Benefit Fraud Inspectorate (BFI) is to inspect benefits administration and counter-fraud activity within the Department for Work and Pensions’ (the Department’s) agencies and local authorities. The findings from our inspections are reported to the Secretary of State.
1.2 Housing Benefit (HB) and Council Tax Benefit (CTB) are important contributions to many household budgets. Just under 4 million people receive HB, including many families with children, and many pensioners. It helps one in 6 households meet the cost of their housing at an annual cost of £11.5 billion. There are over 4.6 million people in receipt of CTB at an annual cost of over £2.8 billion.
1.3 In its response to the Housing Green Paper of November 2000 the Department agreed to develop a performance framework for HB and CTB. BFI played a major role when HB and CTB Performance Standards were launched and published in April 2002. Each local authority was sent a copy of the Standards at that time, and encouraged to complete a self-assessment against them.
1.4 The Performance Standards allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. The Department has chosen to consider the full picture of what constitutes an effective and secure Benefits service, that meets wider strategic objectives, rather than focusing solely on speed and accuracy of processing claims and security. They are the Standards the Department expects local authorities to aspire to in time.
1.5 How quickly local authorities meet these Standards will depend on the circumstances they face, current levels of performance and the level of local and national resources, as well as the effectiveness of change management within the authority itself. The Department has therefore not set a timescale for how rapidly the Standards will need to be met by local authorities.
1.6 This report assesses London Borough of Bromley’s administration of HB and CTB against Performance Standards. Our findings should be read in conjunction with the Performance Standards pack. This can be downloaded from the Department’s website www.dwp.gov.uk/housingbenefit/publications
1.7 We
are grateful to London Borough of Bromley for its help and
co-operation throughout this inspection.
Overall performance
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Fig. 1.1: Performance against Standard |
|
|
Source: BFI analysis
This and all subsequent radar graphs show the levels of performance for each
of the facets of individual Performance Standards. The Standard score is the
number of levels of performance that need to be achieved for the local authority
to be at Standard. The BFI assessment is the number of levels of performance
that have been achieved. Where the inner line is outside the outer line, the
local authority is performing above Standard.
1.8 This and all subsequent radar charts show the levels of performance for each of the elements of Performance Standards. The Standard score is the level of performance that needs to be achieved for the authority to be at Standard. BFI’s assessment is the level of performance that has been achieved. Where the assessment score exceeds the Standard score the authority is performing above Standard.
1.9 London Borough of Bromley assessed itself against Performance Standards in July 2003. Our inspection was based on the validation of London Borough of Bromley’s self-assessment against the 7 functional areas. We also measured progress against the recommendations in our first report published in September 2001.
1.10 Figure
1.1 shows London Borough of Bromley’s performance against Performance Standards.
The outside line shows the Standard level of performance, the inside line
is BFI’s assessment of London Borough of Bromley’s performance at the time
of our second inspection in
November 2003.
1.11 London
Borough of Bromley’s response to the recommendations made in our first inspection
report and London Borough of Bromley’s
self-assessment indicated a significant improvement in benefits administration.
Of the 78 recommendations that were still applicable London Borough of Bromley
had met or partially met 56 (72%). A summary of London Borough of Bromley’s
progress against our previous recommendations is made in Appendix A.
1.12 We
found a great deal of commitment and professionalism in London Borough of
Bromley’s efforts to improve benefits administration and counter-fraud work.
Although London Borough of Bromley was not at Standard in any of the 7 functional
areas, there were many components within these elements where London Borough
of Bromley was at or above Standard. During our inspection we also found examples
of innovation and good practice.
1.13 London Borough of Bromley had comprehensive strategies and policies, supported by quality guidance for staff. However, more work was needed to link these corporate strategies to HB and CTB operations.
1.14 London Borough of Bromley originally contracted out its Benefits service in 1993 under the voluntary competitive tendering arrangements. The contract expired at the end of March 2002 and a 7-year contract was awarded to a new Service Provider in April 2002.
1.15 The verification of information had improved since our first inspection. We were further encouraged to find that London Borough of Bromley was on schedule to commence implementation of the Verification Framework in February 2004, with full compliance and funding from May 2004.
1.16 London Borough of Bromley had made a number of improvements in its claims processing since our first inspection. The amount of work outstanding had dramatically reduced. Processing times for new and renewal claims and changes of circumstances had improved and were continuing to reduce following the eradication of a backlog. The introduction of an electronic benefit form, known as the e-benefit form, demonstrated how claims could be processed more effectively using innovative working practices.
1.17 We were impressed with the quality and level of management checking, providing assurance on accuracy and security issues. However, we had quite serious concerns regarding the security of its post opening operation.
1.18 Since our first report, London Borough of Bromley had substantially improved the way it tackled fraud by entering into a partnership with London Borough of Greenwich to provide its counter-fraud service. This proved to be very successful with improvements in the number of administrative penalties and prosecutions.
1.19 London Borough of Bromley had comprehensive plans to improve its HB and CTB overpayments work. However, it accepted that more work was needed to improve its recovery of overpayments.
London Borough of Bromley
1.20 London Borough of Bromley is one of 33 London boroughs. It is located in South East London, bordering Surrey and Kent, and is the largest of the London boroughs. It provides services to approximately 295,000 residents.
1.21 Results from the 2001 census indicated that 92% of the borough’s residents were white British.
1.22 Residents enjoyed a higher than average annual income compared to national standards, with 37% of London Borough of Bromley’s households having an income of £30,000 and over compared to 24% for the UK.
1.23 Just over 14% of the population were retired. Figures produced for the House of Commons Library in February 2003 showed that the unemployment rate was relatively low at 2.7%.
1.24 The London Borough of Bromley was Conservative led, holding 41 of the 60 seats. Liberal Democrats held 13 seats and the remaining 6 were held by Labour. In April 2002 the council introduced a cabinet structure in line with the Local Government Act 2000.
Benefit expenditure and caseload
1.25 Figure 1.2 shows London Borough of Bromley’s HB and CTB expenditure compared to gross revenue expenditure.
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Fig. 1.2: London Borough of Bromley’s HB and CTB expenditure compared to gross revenue expenditure |
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Year |
Total gross revenue expenditure (£ million) |
HB/CTB expenditure (£ million) |
HB/CTB expenditure as % of gross revenue expenditure |
|
2000/01 |
434.084 |
61.584 |
14.2 |
|
2001/02 |
461.836 |
62.400 |
13.5 |
|
2002/03 |
498.803 |
69.551 |
13.9 |
Source: London Borough of Bromley
1.26 London Borough of Bromley transferred its council housing stock to Broomleigh Housing Association in 1992. At the time of our second inspection Broomleigh Housing Association was the single largest landlord in the borough. Its tenants made up approximately 50% of the HB caseload. Although there was no council housing stock, the Benefits service processed Non-Housing Revenue Account cases in respect of customers housed by its Homeless Persons’ Unit.
1.27 London Borough of Bromley’s HB and CTB caseload had increased slightly over the last 3 years as shown in Figure 1.3.
|
Case type |
2001/02 |
2002/03 |
2003/04 |
|
Combined HB and CTB |
10,813 |
11,155 |
12,188 |
|
HB only |
1,406 |
1,321 |
1,348 |
|
CTB only |
3,535 |
3,562 |
3,727 |
|
Total |
15,754 |
16,038 |
17,263 |
Source: London Borough of Bromley
Performance against Standard
Strategic Management
1.28 London Borough of Bromley was not at Standard in this area. However, there were some significant strengths. London Borough of Bromley met the Standards for:
· Performance monitoring
· Organisational structure
· Contractors
· Management assurance
· External Audit.
1.29 Although it was not at Standard for Internal Audit it was near to achieving Standard in this element.
1.30 London Borough of Bromley can meet the Standard for Strategic Management by:
· securing Members’ endorsement for its HB Mission Statement, making staff aware of the Mission Statement and ensuring that the Benefits service is clearly featured in corporate, strategic and operational plans
· improving and communicating its Business Continuity plan
· ensuring that managers and staff fully understand the performance targets
· including up-to-date information on locally agreed procedures in its operational guidance
· using management information to establish areas of low benefit take-up
· developing a formal training strategy
· regularly reviewing user access levels for its IT systems
· addressing the issues identified in its race equality scheme
· formalising and evaluating internal and external working arrangements
· monitoring its service level agreements to ensure agreed standards are being met.
Customer Services
1.31 London Borough of Bromley was not at Standard in this area. However, it was at Standard for its Clear, simple, accessible claim form and its Clear, informative decision letters. It had also produced an e-benefit form that had helped to reduce processing times.
1.32 London Borough of Bromley provided a telephone and personal caller service, well in excess of the required 36 hours. It was also considering extending this to accommodate working customers.
1.33 London Borough of Bromley can achieve Standard in this area by:
· introducing procedures to ensure that 80% of customers are seen within 15 minutes of arrival
· developing a strategy to encourage benefit take-up
· regularly undertaking customer surveys and taking action to improve its services in line with customer responses
· formalising its training for Customer Services Advisers
· ensuring the needs of customers with special needs are met
· monitoring the progress of appeals and requests for reconsideration.
Processing of Claims
1.34 Following our first inspection District Audit amended London Borough of Bromley’s reported performance for new claims. These new figures showed London Borough of Bromley as processing new claims in 120 days for 2000/01. London Borough of Bromley’s reported performance for processing new claims for the period from April 2003 - November 2003 was 81 days, showing an improvement since the time of our first inspection.
1.35 However, London Borough of Bromley still has much to do to reach the Standard of 36 days. A backlog of work had been cleared in May 2003. Clearance of this old work had prevented achievement of speed of processing claims and changes of circumstances targets. However, challenging targets had been set for 2004/05. There was a considerable improvement in processing times reported for October and November 2003.
1.36 London Borough of Bromley was at Standard for Tailoring of benefit periods and Verification of receipt of Income Support (IS) and income-based Jobseeker’s Allowance (JSA(IB)).
1.37 London Borough of Bromley did not insist on original documentation to verify claims, as it was not compliant with the Verification Framework at the time of our second inspection. Once this failing is addressed the quality of verification work will be good. London Borough of Bromley had a thorough approach to validating claims and analysed information received to ensure that discrepancies were investigated before claims were processed. This approach will help the implementation of the Verification Framework.
1.38 London Borough of Bromley had many good practices in the area of management checking. Although there was no longer a legal requirement for its client-side to decide all cases, London Borough of Bromley planned to maintain its checking regime until accuracy levels reached 93%. There was also evidence of analysis of results and targeted remedial training.
1.39 London Borough of Bromley can achieve Standard in Processing of Claims by:
· implementing, as planned, the Verification Framework and providing staff with training about original documentation and identifying false documents
· ensuring it makes payments on account in all appropriate cases
· signing and monitoring the service level agreement with the Rent Service
· meeting the legal requirements for referring claims to the Rent Officer.
Working with landlords
1.40 London Borough of Bromley was not at Standard in this area. However, it had worked closely with Broomleigh Housing Association, to successfully improve the standard of evidence received in support of HB claims.
1.41 The Benefits service had good but informal liaison arrangements with its major landlords. London Borough of Bromley can achieve Standard in this area by:
· taking action to prevent overpayments
· making landlords aware of their responsibilities.
Internal Security
1.42 London Borough of Bromley was not at Standard in this area. Important management controls and mechanisms to provide assurance on the integrity of its systems were inadequate or missing in some key areas, in particular its post opening operation.
1.43 London Borough of Bromley can achieve Standard in this area by:
· revising its post opening procedures
· updating its personnel procedures
· gaining assurance that staff employed by the new Service Provider and external agencies are subject to recruitment checks in line with the Audit Commission’s guidance
· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X
· revising the returned cheque procedure
· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX
Counter-fraud
1.44 London Borough of Bromley was near to achieving Standard in this area. There were many components where it was at or above Standard. We also found examples of innovation and good practice.
1.45 London Borough of Bromley was at Standard in the following elements:
· Policies and procedures
· Liaison with Counter-Fraud Investigation and National Investigation Service, formerly Counter-Fraud Investigation Division.
1.46 London Borough of Bromley was above Standard for:
· Formal cautions
· Prosecutions.
1.47 London Borough of Bromley can achieve Standard in this area by:
· formalising its programme of fraud awareness training for Benefit Assessors and Customer Service Advisers
· matching its HB records against other council records
· revising its procedures for dealing with ‘Do Not Redirect’ post
· maintaining central records to show when and why authorised individuals’ powers have been used
· commencing action on referrals within 5 working days of the referral being sifted
· notifying the Debt Recovery team of any administrative penalties accepted.
Overpayments
1.48 London Borough of Bromley was not at Standard in this area. However, it had a comprehensive Overpayments Strategy and good management information regarding outstanding debts and rates of recovery.
1.49 London Borough of Bromley was above Standard for Decision letters.
1.50 We had concerns regarding classification, overpayment recovery and debt management.
1.51 London Borough of Bromley can achieve Standard in this area by:
· providing formal training and written guidance to all staff involved in the identification and recovery of overpayments
· recording all decisions regarding recoverability
· providing refresher training for staff on the classification of overpayments and from whom debts should be recovered
· using all available recovery methods
· ensuring debts are only written off in appropriate cases
· increasing efforts to recover aged debt.