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 these benefits, including many families with children, and many pensioners. HB and CTB help one in 6 households meet the cost of their housing at an annual cost of £11.5 billion.
1.3 In its response to the Housing Green Paper of November 2000, the Department for Work and Pensions agreed to develop a performance framework for HB. BFI played a major role and the new HB and CTB Performance Standards were launched and published in April 2002. They are standards the Department expects local authorities to aspire to and achieve in time. Each local authority was sent a copy of the Standards in 2002, and have since received the revised version. Local authorities are 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.
1.5 How quickly local authorities meet these Standards will depend on the circumstances they face. These include 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 the London Borough of Lambeth’s administration of HB and CTB against the Performance Standards. The findings in this report should be read in conjunction with the Performance Standards pack, which can be downloaded from the Department’s website, www.dwp.gov.uk.
1.7 We are grateful to the London Borough of Lambeth for its help and
co-operation throughout this inspection.
1.8 Each of the Performance Standards has been assessed by both the London Borough of Lambeth and BFI.
1.9 In recognising that the performance of the Benefits service was poor, the London Borough of Lambeth took further action to address some of the problems in 2003, when an Interim Divisional Benefits manager was appointed. This appointment occurred shortly after the Comprehensive Performance Assessment review, which was carried out by BFI in September 2003 and which found the Benefits service to be providing a poor performance. As a result it was agreed that BFI would inspect the council in May 2004.
1.10 However, the council has been making progress in driving improvement since September 2003, which has included requesting help from BFI’s Performance Improvement Action team to address issues with its speed of processing.
1.11 Following on from the request for help, the Performance Improvement Action team has been working with the council in the period leading up to our inspection. This inspection has not therefore looked at speed of processing in great detail, although we have commented on the progress made in this report.
1.12 More recently, the council has requested further help from the Performance Improvement Action team to look at the issues around overpayments. This work is due to start in September 2004.
Overall performance
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|
Source: BFI inspection assessment
This and all subsequent radar graphs show the levels of performance for each
of the elements 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.
1.13 Figure
1.1 is a radar graph that provides an illustration of the London Borough of
Lambeth’s performance against the Performance Standards’
7 functional areas. The solid outer line shows the Standard level of performance,
the dotted inner line is our assessment of the London Borough of Lambeth’s
performance at the time of our on-site inspection in May 2004.
1.14 Our inspection has validated the council’s self-assessment and assessed progress against the recommendations from our first inspection report.
1.15 Although the Benefits service has been a low priority within the council in the past, this has recently changed. It now remains the final failing service within the council.
1.16 The London Borough of Lambeth has been subject to a number of BFI inspections and reviews in recent years, including:
· a full inspection, which was published in 2001
· a Comprehensive Performance Assessment in December 2002
· a Comprehensive Performance Assessment Improvement Report, which was published in December 2003
· this full inspection, the on-site phase of which was in May 2004.
1.17 At our first inspection, we concluded that:
…Lambeth’s administration of these benefits (HB and CTB) is deeply inadequate, and that radical improvements are needed in all but a few areas.
1.18 The council was providing a poor service to customers and was very slow at putting benefit into payment. Security of information technology was an area of concern, as was the fact that the council routinely assessed benefit entitlement on the basis of weak evidence. The ineffective handling of fraud investigations and the low recovery rate for overpayments compounded these issues.
1.19 However, since then the contract for the administration of HB and CTB with Capita has been cancelled and the service was brought back in-house. Although improvements have been made in relation to speed of processing, the council is still significantly failing all of the Best Value performance indicators and is still working with a backlog.
1.20 At
our first inspection we made a range of recommendations for improvement. This
time we found that although many of the recommendations related to the contracted-out
service, 176 were still appropriate. Of the original recommendations, we found
that 92 had been fully implemented and
18 partially. Around 66 had not been implemented.
1.21 At points throughout the report, we comment on the first BFI inspection, and where appropriate, earlier BFI recommendations have been referred to, alongside current performance.
1.22 Although we found that the London Borough of Lambeth had not reached Standard in any of the 7 Performance Standards, there are some good working practices in place in several of the elements. However, the council needs to make considerable improvements in a number of areas if it is to achieve standard overall. Speed of claims processing and arrears of work in the Benefits service have continued to adversely impact on Best Value performance indicator targets.
1.23 From this inspection, our findings show that the council is providing a fair performance and that some progress has been made since our last inspection. This rating does not include an assessment of performance against the Best Value performance indicators. If this was included, then this rating could be reduced to a poor.
1.24 Customer services has improved considerably within the council since the last inspection. However, work must be done to ensure that all of the reception points within the council provide the same level of service to customers. Work must also continue to provide specific services to customers with particular needs, and it is important that the benefit take-up campaign progresses as soon as possible.
1.25 Internal security is generally an area of strength. Many of the weaknesses identified can be easily and quickly addressed, and this will result in the council being very close to Standard in this area.
1.26 The work of the Benefit Investigation team in securing sanctions is impressive, and demonstrates the council’s determination to stamp out fraud in its Benefits service. Although performance is steadily improving in this area, there is a lack of documentation to support each and every action taken by the team and its managers. Referrals and management checking are also areas which must be addressed and documented.
1.27 The major challenges for the council are to significantly improve the speed of claims processing by eliminating the backlog, while improving and maintaining accuracy and implementing the Verification Framework. Overpayment recovery must also improve, by utilising all opportunities to recover money owed, such as blameless tenant recovery from landlords, which will reduce the need to write-off debts. There is also a need to introduce a more systematic and strategic approach to utilising all management information.
1.28 Reaching Standard in benefits processing performance will improve customer service and relationships with stakeholders and will also contribute to the council’s aims of improving its last failing service.
1.29 Staff within the Benefits service are committed to providing a quality service and at a strategic level the service has the full support of Members and senior management. We were assured by the council that it will act on the findings and recommendations contained in this report.
Performance against Standards
Strategic management
1.30 The
London Borough of Lambeth is at Standard in only one of the
17 Strategic management elements, and this is clearly an area of concern.
1.31 At a corporate level, there is a clear vision, which is captured in the mission statement and strategic priorities for the council. The Recovery plan and the Corporate Services plan both detail the high level objectives and targets that all areas involved in HB and CTB administration must aim to achieve.
1.32 The council complies with the Race Relations Act and this is an area of strength. A Race Equality Scheme exists and is supported by an action plan and a process of equality impact assessments. The Benefits service manager reviews staff training needs with regard to their responsibilities under the Act, with any necessary training provided by the council. The council monitors service usage by ethnic diversity. However, to be above Standard the Benefits service need to monitor the:
· ratio of successful, unsuccessful and non-returned claims by ethnic minority
· ratio of complaints and appeals by ethnic minority.
1.33 Staff within the council receive appropriate training and development, although our inspection has identified areas where improvements could be made. These include extending technical training to customer service staff, developing key work objectives that take into account all aspects of performance and providing fraud awareness training to all council staff.
1.34 Other areas that require improvement, include:
· setting challenging performance targets for all areas involved in the administration of HB and CTB
· monitoring and evaluating performance against these targets, which should then be reported to stakeholders
· reviewing the capture and analysis of management information to ensure that the data gathered is meaningful and accurate and is understood by staff at all levels
· reviewing the organisational structure, to ensure that the Benefits service is run in the most secure and effective way and that formal lines of communication between the Benefits service, the Benefit Investigation team and the Overpayments team exist and are monitored
· utilising management information, to support the strategic aims of the council, by trend analysis and risk assessment.
1.35 The number of internal audit days dedicated to the Benefits service, should be commensurate with the proportion of gross revenue expenditure on benefits, particularly in a failing service. It is therefore important that this is reviewed. Increased use of the Performance Standards as an assessment tool by internal audit will facilitate the improvement of all areas of HB and CTB administration within the council.
1.36 The council does not calculate the cost of claims on a regular basis. This process should be introduced and include all of the areas set out in the Performance Standards.
Customer services
1.37 The
London Borough of Lambeth is not at Standard in any of the
9 Customer services elements. However we did identify some strengths, with
the council being close to Standard in a number of elements.
1.38 Services for customers with special needs are close to Standard. A new strategy to encourage HB and CTB take-up has been produced and when implemented, this strategy will identify and target under-claiming groups as part of take-up campaigns.
1.39 In addition to the main customer reception point in Olive Morris house in Brixton, customers can access the service through 15 Neighbourhood Housing Offices. However, these are scheduled to be rationalised into 5 larger offices and will include HB and CTB surgeries. Although training for staff is generally an area of strength, 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 X
1.40 Areas which gave us particular cause for concern include the:
· ineffective use of the monitoring of complaints and appeals
· ineffective use of the monitoring of customer waiting times
· lack of effective record keeping arrangements which ensure customers only need to produce verification documents once during the life of a claim
· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX
Processing of claims
1.41 The
London Borough of Lambeth is at Standard in only one of the
11 elements in this area.
1.42 A large backlog of work still exists, with the council reporting an average processing time for new claims of 102 days and 57 days for changes of circumstances for the period October 2003 – March 2004.
1.43 Despite these processing delays, the council does not make payments on account in appropriate cases and this is an area of weakness.
1.44 The council does not look strategically at its claims processing and does not use exception reports to identify processing delays. By collecting and analysing focused management information, the council will gain a clearer picture of reasons for delays, allowing for a more proactive approach to tackling processing problems.
1.45 Although customers are encouraged to provide original documentation in support of a claim, we found that this is not adhered to for verification purposes and, partially due to this failing, the council is not at Standard across the majority of verification elements.
1.46 Implementation of the Verification Framework is planned for January 2005. Local verification guidance is available to assessment officers, although the application of it is inconsistent.
1.47 The council is at Standard for confirming receipt of Departmental benefits. We found that entitlement to Income Support (IS) or Jobseeker’s Allowance JSA (income-based) (JSA(IB)) is confirmed prior to deciding a customer’s entitlement to HB and CTB.
1.48 The council has some good management checking practices, including a quality assurance database to monitor and analyse all aspects of its HB and CTB processing. However, it is not at Standard in this element as it does not carry out management checks prior to notifying the customer of a decision on a claim.
1.49 Rent
Officer referrals are not made within regulatory timescales and the council
is not at Standard in this element. We found that although a service level
agreement with the Rent Service was in existence it had expired in
April 2004 and at the time of our on-site inspection the council had not agreed
or signed off a service level agreement for 2004/05.
Working with landlords
1.50 The council is not at Standard in any of the 3 elements of Working with landlords, but has a number of strengths, including:
· holding regular landlord forums with Registered Social Landlords
· providing information packs for private landlords.
1.51 There is a service level agreement due to be signed with Lambeth Housing Association Group. There are no such agreements pending with any private landlords, although several are planned.
1.52 The council would be at Standard and could improve performance in other areas if it:
· provided an information pack targeted specifically at Registered Social Landlords
· publicised and provided literature for landlords at customer service points
· formalised guidance for staff on prioritising and dealing with eviction cases
· recovered overpaid benefit paid to landlords in respect of third party tenants.
Internal security
1.53 The
London Borough of Lambeth is not at Standard in any of the
5 elements. However, we found that recruitment procedures, and cheque production,
storage and dispatch processes are good.
1.54 The council’s main areas of weakness include:
· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X
· access to claims is not wholly barred for staff who have declared interest in a case. View only access is available which compromises this data and places staff concerned at risk
· the internal audit work programme does not reflect the size of payments of HB and CTB made by the council
· the absence of a document retention and destruction policy. The council should ensure that a policy is introduced to safeguard customer information and adhere to the Data Protection Act 1998
· income collection statistics from the Housing Rents system could not be reconciled to the council’s Benefits system.
Counter-fraud
1.55 The
London Borough of Lambeth is not at Standard in any of the
12 elements. However, it is very close to Standard in the 3 sanctions elements.
Although outcomes, in terms of sanctions achieved, demonstrate vastly improved
effectiveness since the new Benefit Investigation team was recruited in October
2002, there remain a number of weaknesses that need to be addressed if the
council is to achieve the required Performance Standard.
1.56 The council’s main area of weakness is that it does not maximise its potential for detecting fraud in its systems. Referrals from the public are not encouraged and there are no fraud posters at customer reception points that warn the public of the consequences of seeking to defraud the service. Nor is there any encouragement for them to make referrals via the fraud hotline.
1.57 Staff do not receive regular fraud awareness training to help them to detect fraudulent claims or false supporting documentation. Additionally, the ‘Do Not Redirect’ scheme is not fully utilised to enable the council to investigate cases where a redirection has been placed on a customer’s address.
1.58 Another area of weakness is the management of the Benefit Investigation team. We found that procedural guidance for new investigators is inadequate and fraud files were not securely stored. We also found that existing management information had not been analysed to inform resource allocation or the prioritisation of counter-fraud work. Fraud files were closed without authorisation from managers, and where the manager had provided case direction or checking, there was no supporting documentation. In addition, targets for sifting and starting investigations were not monitored.
1.59 We are also concerned that the relationship with the Counter-Fraud Investigation Service has broken down, and this needs to be addressed as a matter of urgency. Work is ongoing between investigators, although it is recognised that the partnership agreement is not effective.
Overpayments
1.60 The
London Borough of Lambeth is not at Standard in any of the
8 elements in this area.
1.61 Failure to identify and prioritise changes of circumstances has resulted in overpayments occurring, or being allowed to continue, unnecessarily.
1.62 Our sampling showed that while changes of circumstances that result in an overpayment are accurately calculated, the delay in processing them means that overpayments are being allowed to run on unnecessarily. This is causing Local Authority errors that are being under-declared and as a result, the subsidy claim is overstated.
1.63 XXXX 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 X
1.64 A comprehensive Overpayments Policy and Procedures manual exists, which covers all aspects of the overpayments process and recovery. Irrecoverable debts are written off and procedures are in place, with the appropriate levels of authorisation.
1.65 Not all recovery methods are employed and staff exercise discretion in setting recovery amounts based upon individual case circumstances.
1.66 We were pleased to find that the level and age of debt is reported to Members.
1.67 To achieve Standard, the council needs to:
· instigate an official overpayments training course for the Overpayments team
· consider using debt collection agencies
· introduce management checks to provide assurance that overpayments are classified correctly.
London Borough of Lambeth
1.68 The London Borough of Lambeth measures 7 miles north to south and about 2 and a half miles east to west. It is one of a ring of 13 local authorities which constitutes Inner London.
1.69 Lambeth is the largest Inner London borough with a population of around 260,000. It is made up of the 5 town centres of North Lambeth, Streatham, Clapham and Stockwell, Norwood and Brixton.
1.70 There are many tourist attractions within the borough and a thriving and expanding arts and leisure industry, including the National Film Theatre and the Royal Festival Hall.
1.71 The District has 21 wards served by 63 elected councillors. The council operates a system that involves a Leader of the council and an Executive. The Leader is part of the Executive, which is made up of 8 councillors in total. The Executive is responsible for making key decisions and leads the direction of the council.
1.72 District
elections took place on 10th June 2004 and the political
make-up of the council can be seen in Figure 1.2.
|
Party |
Seats |
|
Conservative |
7 |
|
Labour |
29 |
|
Liberal Democrat |
27 |
|
Total |
63 |
Source: London Borough of Lambeth
1.73 In total, 34% of Lambeth’s population are from ethnic minorities – the seventh highest figure for a London Borough. The largest ethnic groups being Black Caribbean (12.1%) Black African (11.6%) and Other Black (2.1%). Approximately 132 languages are spoken in the borough and after English, the main languages spoken are Yoruba and Portuguese.
1.74 The total housing stock, consisting of 118,440 properties, is 36% owner occupied.
1.75 Lambeth has high levels of employment, although unemployment in the borough is 6.1%, which is above the national average of 3.4%. The economic activity of the borough can be seen in Figure 1.3.
|
Status (all people aged 16 - 74) |
London Borough of Lambeth |
England |
|
Employed |
61.7 |
60.9 |
|
Unemployed |
6.1 |
3.4 |
|
Students (economically inactive) |
6.7 |
4.7 |
|
Students (economically active) |
3.2 |
2.6 |
|
Retired |
7.2 |
13.5 |
|
Looking after home/family |
5.7 |
6.5 |
|
Permanently sick or disabled |
4.6 |
5.3 |
|
Economically Inactive |
4.9 |
3.1 |
Source: 2001 Census, Office of National Statistics
Benefit expenditure and caseload
1.76 Figures 1.4 and 1.5 illustrate the authority’s HB and CTB expenditure and caseload.
 |
|
Source: Housing Services Division and London Borough of Lambeth |
 |
|
Source: Housing Services Division and London Borough of Lambeth |
1.77 Figure 1.6 compares the gross HB expenditure with the gross revenue expenditure of the council in 2001/02, 2002/03 and 2003/04.
|
Year |
total gross revenue expenditure (£ millions) |
HB/CTB expenditure
(£ millions) |
HB/CTB expenditure as % of total revenue expenditure |
|
2001/02 |
909.4 |
69.5 |
7.64 |
|
2002/03 |
1,047.1 |
112.7 |
10.77 |
|
2003/04 |
1,107.7 |
114.9 |
10.37 |
Source: Housing Services Division and London Borough of Lambeth