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 This and all subsequent radar graphs show the levels of performance for each of the elements of 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.

2.2 Benefit 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

2.3 A statement expressing the Vision for the local authority enables Members, managers and staff to have a clear sense of direction, purpose and focus for their work. It also allows the public to understand where the key priorities for the council lie and how these fit into the overall business aims for delivery.

2.4 We found that Sandwell Metropolitan Borough Council was not at Standard in this element because its Revenues and Services vision statement did not include a clear statement of intent to provide an effective and secure Revenues and Benefits service to the standards set out in Performance Standards.

2.5 Sandwell Metropolitan Borough Council is a member of the Sandwell Partnership, a broad-based partnership of local organisations representing public, private, community and voluntary sectors. The partnership which was set up in 1999, was the accredited Local Strategic Partnership, and was chaired by the Leader of Sandwell Metropolitan Borough Council. The partnership had a vision for Sandwell:

The Sandwell of 2020 will be a thriving, sustainable, optimistic, and forward looking community.

2.6 Under the banner of the Sandwell Plan the partnership had developed 5 main themes:

· Health

· Learning

· Economy

· Transforming the Environment and Urban Form

· A Safer Sandwell.

2.7 Neighbourhood and borough-wide strategies had also been developed along with action programmes to achieve the aims and objectives of the Vision. Further drivers to achieve the vision were the 5 core issues Sandwell Metropolitan Borough Council had adopted. These core issues were:

· Community Safety

· E-government

· Equality

· Sustainability

· Risk Management.

2.8 Sandwell Metropolitan Borough Council had developed a Corporate Plan following on from the Sandwell Plan. It set out the council's top 10 priorities for improvement as follows:

· Raising standards in schools

· A safe borough - clean and tidy

· Transforming the physical environment

· Opportunities for high value jobs for local people

· Improving housing choice

· Strengthening the protection and support for vulnerable children

· Lifelong learning

· Things for young people to do

· Extended schools

· Local communities.

2.9 While there was no direct link between the Revenues and Benefits service and these priorities, the performance of the Revenues and Benefits service clearly needed to play a part in the achievement of several of these priorities. The Corporate Plan also detailed Sandwell Metropolitan Borough Council’s key initiatives, and listed the further development of the Benefits Service partnership to modernise the local tax collection and the administration of HB and CTB, as one of the most important of these initiatives.

2.10 Sandwell Metropolitan Borough Council also produced a Best Value Performance Plan on an annual basis in accordance with its statutory duty to do so. As well as restating the corporate top 10 priorities, the Best Value Performance Plan 2003, introduced the council's Comprehensive Performance Assessment Improvement Action Plan. This action plan included 8 top priorities, the seventh of which was as follows:

Respond to the findings/recommendations of the Benefit Fraud Inspectorate inspection of the Benefits Service.

2.11 We were pleased to see the findings of our inspections were a priority for Sandwell Metropolitan Borough Council.

2.12 The Finance and Business Services Division of Corporate Services included Revenues and Benefits services, of which the Benefits service formed a part. The divisional mission statement read as follows:

"Putting People and Customers First" by providing professional, flexible and affordable support services to the Council and its partners together with delivering caring and efficient front line services to the community.

2.13 A key objective for the division was:

Providing excellent frontline services to service users in the Community.

2.14 A key action to deliver this objective was:

Completion of the Revenues and Benefits Services modernisation assisted by the partnership arrangement to improve accessibility and responsiveness of service provision.

2.15 The strategic vision for the Revenues and Benefits service was developed in conjunction with Members, and endorsed by them in July 2002. Links between the Revenues and Benefits service vision and the council's corporate objectives were apparent. The Vision contained clear references to Performance Standards.

2.16 Supporting its strategic vision, Revenues and Benefits services had its own mission statement:

Putting People First by ensuring the service provided to our customers is right first time, every time and is delivered on time in an open and caring way.

2.17 The Revenues and Benefits service vision was publicised internally. However, while we were on site we found that although some staff were aware of the Vision and its content, others were unaware of its existence.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· includes in its Revenues and Benefits service vision a clear statement of intent to provide an effective and secure Revenues and Benefits service to the standards set out in Performance Standards · ensures that all staff are made aware of and understand its vision for the Revenues and Benefits service.

Policy objectives

2.18 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 officers 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 high level strategic and business plans.

2.19 Sandwell Metropolitan Borough Council was not at Standard in this element because it did not have its Revenues and Benefits service strategic policies and objectives annually endorsed by Members, and reviewed as part of the council's annual planning cycle.

2.20 However, the council had explicit strategic policies and objectives for its Revenues and Benefits service which:

· were drawn directly from the Revenues and Benefits service vision statement

· bridged the gap between the Vision and its current position

· included objectives to meet the full range of Performance Standards over time.

2.21 During 2002/03 Sandwell Metropolitan Borough Council conducted a self-assessment against Performance Standards. This resulted in the Revenues and Benefits service seeking Members' approval for a new policy framework including the Revenues and Benefits service vision statement, an Overpayment Recovery Policy, and an updated Counter-fraud Policy.

2.22 Sandwell Metropolitan Borough Council used the European Foundation Quality Model framework, a recognised business excellence model, to aid its planning processes. It carried out further work assessing gaps between the Vision and the current position, and updated its Revenues and Benefits Service Improvement Plan in February 2003 as a result. The purpose of this plan was to pull together from various sources, and summarise, all actions planned to deliver improvements in the Revenues and Benefits service. The actions were categorised under headings as follows:

· Leadership

· People

· Policy and strategy

· Partnership and resources

· Processes

· Society

· Results.

2.23 The Revenues and Benefits Service Improvement Plan was a comprehensive document detailing planned actions under each category. Figure 2.2 shows the number of actions in each category.

Fig. 2.2: Planned actions by category in the Revenues and Benefits Service Improvement Plan February 2003
Category	Number of actions
Leadership	12
People	17
Policy and strategy	17
Partnership and resources	8
Processes	167
Society	1
Results	23
Total	245

Source: Sandwell Metropolitan Borough Council

 

2.24 Sandwell Metropolitan Borough Council had also set objectives:

· as interim targets where a step change approach was required to achieve the high level objectives

· that sought efficiency savings and value-for-money improvements in line with Best Value principles

· specifically to minimise backlogs.

2.25 These objectives were included in one or more of the following documents:

· Divisional Service Plan

· Best Value Performance Plan

· Revenues and Benefits Service Improvement Plan

· 3-year business plan

· Comprehensive Performance Assessment Improvement Plan.

2.26 However, there was no single definitive document which staff could refer to that covered all objectives for the Revenues and Benefits service.

2.27 Sandwell Metropolitan Borough Council told us that it was not its practice for Members to annually endorse its strategic policies and objectives, or for the council's annual planning cycle to include the review of all policies and objectives.

Recommendations

We recommend that Sandwell Metropolitan Borough Council ensures that its strategic policies and objectives for the Revenues and Benefits service are: · annually endorsed by Members · reviewed as part of its annual planning cycle.

Operational planning

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

2.29 Sandwell Metropolitan Borough Council was not at Standard in this element because it did not:

· ensure that its plans recognised the impact on all stakeholders

· ensure that its plans were communicated to all stakeholders

· have a documented business continuity plan in accordance with Performance Standards guidelines.

2.30 However, the council operated a comprehensive planning framework that had been adopted across the entire council. Plans for the Revenues and Benefits service were contained in the following documents:

· Best Value Performance Plan

· Revenues and Benefits Service Improvement Plan

· 3-year business plan

· Divisional Service Plan

· Comprehensive Performance Assessment Improvement Plan.

2.31 Plans for the Revenues and Benefits service demonstrated a number of strengths:

· taking into account local aims and targets derived from the council's vision statement

· prioritising objectives and planning for continuous improvement in service delivery, through step changes, where appropriate

· identifying key milestone dates, and having clear lines of responsibility and accountability for progress reporting throughout.

2.32 Sandwell Metropolitan Borough Council implemented a new capacity planning initiative in May 2003 following the introduction of its new benefits IT system. The Capacity Plan was developed using computer software to improve planning of workload and resources. During the on-site phase of our inspection we were told that the Capacity Plan had used some estimated figures and had not been used to its full effect. However, while we were on site Sandwell Metropolitan Borough Council appointed a Project Support Officer who had been given the task of developing the capacity planning tool further so that it would automatically be fed with actual performance figures, and as a result would be much more useful.

2.33 Despite the capacity planning tool using estimated figures, Sandwell Metropolitan Borough Council had been able to use it to predict the likely effect on its outstanding workload following the departure of agency staff who had been employed on a temporary basis. Sandwell Metropolitan Borough Council was concerned about the likelihood of the numbers of outstanding cases increasing with resultant delays for customers. The information produced by the capacity planning tool had proved useful for senior officers who were able to make a case to the budget holder and Members to extend the Revenues and Benefits service’s use of agency staff. During our last inspection we commented on the Revenues and Benefits service backlog of outstanding work. We discuss in some detail the situation with regard to the outstanding work that we found while we were on site, in the Processing of Claims section of this report.

2.34 The Revenues and Benefits service was clearly considered important by senior officers and Members, and had a high profile within Sandwell Metropolitan Borough Council. We were told that Members had taken a great interest in the performance of the Revenues and Benefits service, and that they had been very supportive. Progress against operational plans was monitored, and was reported on a quarterly basis to the Performance Management Scrutiny Committee.

2.35 Sandwell Metropolitan Borough Council had made significant changes to its Revenues and Benefits service in 2002/03, including entering into a partnership agreement for several key parts of the service, implementing a new benefits IT system, and moving the location of the service. We were pleased to see it had appointed a project manager to co-ordinate the implementation of these major changes.

2.36 While we were on site, Sandwell Metropolitan Borough Council agreed that although its plans recognised the impacts on a number of its stakeholders, and efforts were made to communicate plans to them, not all stakeholders were included.

2.37 The Revenues and Benefits service did not have a documented business continuity plan. The council told us that a senior officer from the Revenues and Benefits service had been given responsibility for producing a documented business continuity plan. However, we were not made aware of any target date set for the delivery of this plan.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· ensures that its plans recognise the impact on all stakeholders, and communicates plans to all stakeholders · develops a documented business continuity plan in accordance with Performance Standards.

Introduction of Pension Credit and tax credits

2.38 Sandwell Metropolitan Borough Council told us that the introduction of tax credits in April 2003 had little effect on the Revenues and Benefits service. This was thought to be because of the long lead-in time available for the introduction of the change.

2.39 However, the introduction of Pension Credit in October 2003 had a significant impact on the Revenues and Benefits service. Sandwell Metropolitan Borough Council had recognised the significance of the change and set up a project team of 3 Team Leaders and 3 Senior Officers to manage the change.

2.40 Sandwell Metropolitan Borough Council received a new software release for the benefits IT system that included enhancements for the Pension Credit changes but a major training effort was required to introduce the changes. The Training and Policy Manager devised and delivered a comprehensive training package to all Revenues and Benefits service staff.

2.41 In November 2003, the Revenues and Benefits Manager reported to Members on the impact of introducing the Pension Credit changes. Members were advised of the difficulties experienced by Sandwell Metropolitan Borough Council, which included:

· the need to close down the benefits IT system for 5 days while the new software was installed

· incorrect or incomplete notifications in respect of all of the new Pension Credit awards received from The Pension Service.

2.42 Sandwell Metropolitan Borough Council told us that it had a service level agreement with The Pension Service at Walsall and we were provided with a copy of the notes of the initial liaison meeting between the 2 parties.

Performance targets

2.43 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.

2.44 Sandwell Metropolitan Borough Council was not at Standard in this element because it did not:

· set performance targets that covered the whole range of policy objectives for its HB and CTB service

· ensure that all staff and managers in the Revenues and Benefits service understood the performance targets.

2.45 Revenues and Benefits service performance targets, including Best Value Performance Indicators, were included in the council’s Performance Plan. Sandwell Metropolitan Borough Council had set performance targets that were specific, measurable, achievable, relevant and time-based for all aspects.

2.46 In setting its performance targets, Sandwell Metropolitan Borough Council took account of the performance levels it had achieved and also the performance levels achieved by other metropolitan authorities. Details of the performance levels that it had achieved in 2001/02 and 2002/03 were shown in the Performance Plan, providing a baseline against which future performance could be measured.

2.47 Sandwell Metropolitan Borough Council told us it had not set any Revenues and Benefits service targets for dealing with telephone or personal callers because there were no Best Value Performance Indicators in 2003/04 for this area of work. However, the Corporate Development Plan for 2003/04 had identified customer service as one of the council’s 4 key priority areas.

2.48 We were provided with a copy of Sandwell Metropolitan Borough Council’s Employee Information Pack, which included the council-wide standards for handling telephone calls and correspondence. Sandwell Metropolitan Borough Council’s corporate targets were to:

· answer 90% of telephone calls received within 6 rings

· reply to 90% of letters within 10 working days.

2.49 We would expect performance targets to be communicated to all relevant stakeholders. We found evidence that Sandwell Metropolitan Borough Council had a mechanism in place to communicate performance targets to customers, Members and Revenues and Benefits service staff. A copy of the Performance Plan including performance targets was provided to all Members, officers and managers within the council. A shorter version of the plan, which Sandwell Metropolitan Borough Council described as more user-friendly, was published in Sandwell Times, a local free newspaper, in March 2003 and delivered to all households in the borough. In addition, the performance targets for the Revenues and Benefits service were published in a staff newsletter and included in the Spring 2003 update paper for Members.

2.50 In addition to communicating performance targets to Revenues and Benefits service staff, we would expect assurance to be sought to ensure that staff understood the performance targets. Sandwell Metropolitan Borough Council did not seek such assurance from staff and told us it could not be certain that staff understood the performance targets.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· sets performance targets for its Revenues and Benefits service that cover the whole range of its policy objectives, in particular, clearance times for telephone and personal callers · introduces procedures to provide assurance that performance targets are understood by staff and managers in the Revenues and Benefits service.

Performance monitoring

2.51 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.

2.52 Sandwell Metropolitan Borough Council was not at Standard in this element because:

· it did not collect sufficient accurate management information to monitor all performance targets, including the national Best Value Performance Indicators

· it did not provide the Department with accurate management information returns

· managers and staff in the Revenues and Benefits service were unaware of the levels of performance in their own areas.

2.53 Sandwell Metropolitan Borough Council aimed to collect management information each month to monitor performance against its service delivery targets. Since implementing its new benefits IT system in April 2003, Sandwell Metropolitan Borough Council had produced management information reports each month with the exception of July and October 2003. These reports related to the whole of the Revenues and Benefits service. Sandwell Metropolitan Borough Council had not been able to produce reports by the end of the on-site phase of our inspection to show the performance of teams within the Revenues and Benefits service.

2.54 We found a deficiency in the management information collected by Sandwell Metropolitan Borough Council in respect of its overpayment recovery and customer services performance. We also identified that Sandwell Metropolitan Borough Council had incorrectly reported the clearance time of changes of circumstances cases in 2003/04.

2.55 The management information reports provided to us by Sandwell Metropolitan Borough Council for the period from April 2003 - August 2003 did not include its overpayment recovery performance against the 2003/04 target. Sandwell Metropolitan Borough Council told us that this was due to problems extracting information from its benefits IT system. The council also told us the reports produced since August 2003 were not accurate.

2.56 While we were on site, we identified inconsistencies in the way that Sandwell Metropolitan Borough Council had recorded the start date for the calculation of the clearance time for changes of circumstances cases. The inconsistencies were partly attributable to a lack of clarity in the procedural guidance provided to Revenues and Benefits service staff. We comment further on this issue in the Processing of Claims section of this report but, based on our findings, clearance times for changes of circumstances had been inaccurately reported.

2.57 At the time of the on-site phase of our inspection, the subsidy claim for 2002/03 was still at the pre-audit stage but Sandwell Metropolitan Borough Council told us it would be submitted on time. Earlier subsidy claims had been submitted to the Department on time but had been subjected to some qualification by External Audit. The qualifications related to isolated procedural errors made during the process of assessing benefit claims.

2.58 Prior to introducing its new benefits IT system, Sandwell Metropolitan Borough Council told us that management information returns to the Department had always been made on time. By the time of the on-site phase of our inspection, Sandwell Metropolitan Borough Council had made 3 management information returns to the Department using the new system. Due to a lack of familiarity with the new system, the first 2 returns were made after the due dates but Sandwell Metropolitan Borough Council had forewarned the Department. However, the latest return had been submitted on time.

2.59 The Revenues and Benefits service provided the council’s Performance Management Scrutiny Committee with a quarterly update report against the key performance measures and targets. We were provided with copies of reports that included:

· a measurement of performance achievements against Best Value Performance Indicators

· a commentary on the impact of the performance of the Revenues and Benefits service on corporate objectives

· the work outstanding at the time of the report and an overview of the level and nature of the benefit administration work completed since the previous report.

2.60 Sandwell Metropolitan Borough Council told us that management information to monitor performance against service delivery targets was only available for the whole Revenues and Benefits service. It was not possible for the different teams dealing with claims from private tenants or council tenants to measure their own group performance against service delivery targets. Sandwell Metropolitan Borough Council told us it used the level of outstanding work as a measure of performance for individual teams.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· resolves the discrepancy concerning the recording of clearance times in changes of circumstances cases and ensures that accurate management information is available to monitor performance against targets · ensures that accurate management information about average time taken to process changes of circumstances cases is provided to the Department · produces management information reports at team level to enable managers and staff to be aware of the ongoing levels of performance against service delivery targets for their own functional areas.

Organisational structure

2.61 It is important that human and other resources are available 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 benefits and counter-fraud work within Finance or Housing, or a combination within these or other departments.

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

2.63 In our last inspection report, we recommended that Sandwell Metropolitan Borough Council should:

· create new posts to supervise staff in the operational teams

· recruit permanent staff to fill vacant posts in the Benefits Service

· review the staffing level in the Benefit Investigation team.

2.64 Sandwell Metropolitan Borough Council reported to the Department in December 2001 that it had created the new supervisory posts, and we found that officers of the appropriate grade were in post at the time of this inspection.

2.65 Sandwell Metropolitan Borough Council reported to the Department in December 2001 that it was still experiencing problems in the recruitment of permanent staff. During this inspection, Sandwell Metropolitan Borough Council told us that its partner had been providing trained temporary staff to cover vacancies.

2.66 Following our previous inspection the council made several successful bids to the Performance Standards Help Fund and was granted funds on each occasion to assist with recruitment and training costs.

2.67 Sandwell Metropolitan Borough Council told us it had continued to use temporary staff to cover vacancies. On 1 October 2003, the Director of Finance and Business Services provided the Cabinet Leader and Cabinet Members with an update on staffing levels and performance achievements of the Revenues and Benefits service. Members were told that the Revenues and Benefits service had recruited 35 Benefits Processors and 14 staff for Customer Services since November 2002. While we were on site, Sandwell Metropolitan Borough Council told us it had 16 vacancies for Benefits Processors and several vacancies in other areas of the Revenues and Benefits service.

2.68 Sandwell Metropolitan Borough Council told us Members had approved the recruitment of 3 additional officers in the Benefit Investigation team. The final complement of 14 officers was expected to be in place and trained by September 2004.

2.69 Sandwell Metropolitan Borough Council was not at Standard for this element because there were no clear lines of communication between the Revenues and Benefits service and Housing Direct, who provided housing services for council tenants.

2.70 Figure 2.3 illustrates the high level organisational structure of Sandwell Metropolitan Borough Council and the link with Finance and Business Services.

Fig. 2.3: Organisational structure of Sandwell Metropolitan Borough Council

Source: Sandwell Metropolitan Borough Council

 

2.71 Figure 2.4 shows the organisational structure of the Revenues and Benefits service and its reporting line to the Director of Finance and Business Services, who was the Section 151 Officer.

Fig. 2.4: Organisational structure of the Revenues and Benefits service

Source: Sandwell Metropolitan Borough Council

2.72 Figure 2.5 shows the areas of responsibility that were assigned to individual managers in the Revenues and Benefits service.

Fig. 2.5: Areas of responsibility for Revenues and Benefits service managers
Development and Monitoring Manager	Customer Services Manager	Operations Manager	Investigations Manager
Contracts, Appeals and Monitoring	Customer Enquiry Counters	Benefits processing	Benefit Investigation team
Overpayments Team	Call Centre	Council Tax
Training	Visits	Business Rates
Systems	Post Room	Advocacy
Fund Management		General Debts
Service Development		Former Tenant Arrears
Revenues and Benefits service IT staff		Poll Tax

Source: Sandwell Metropolitan Borough Council

2.73 Sandwell Metropolitan Borough Council used the following generic grades in the Revenues and Benefits service:

· Team leaders – reported to respective Revenues and Benefits service managers

· Senior officers – reported to team leaders and supervised staff

· Technical officers – reported to senior officers and provided technical advice on complex cases

· Revenues and Benefits officers – included Benefits Processors and Customer Advisers

· Clerical officers – provided administrative support.

2.74 The management lines of responsibility within the Revenues and Benefits service were clear and logical. We interviewed a wide selection of staff and managers from the Revenues and Benefits service. All the officers we interviewed understood their own roles and responsibilities and showed an awareness of the roles of colleagues and managers.

2.75 We would expect the organisational structure of the Revenues and Benefits service to provide clear lines of communication with other parts of the council’s organisation that were involved with HB and CTB administration. Housing Direct had a major but indirect involvement with HB administration for council tenants. While regular meetings took place between the Revenues and Benefits service and Housing Direct, these were conducted at practitioner level and there were no formal arrangements for regular meetings at a more senior level.

2.76 Housing Direct told us the effects of delays in processing claims by the Revenues and Benefits service had previously caused difficulties, but the situation regarding delays in paying benefit had improved in the few months prior to our inspection.

2.77 Housing Direct told us the introduction of the new benefits IT system had resulted in a change in the level of claims information that was directly available to its staff. Housing Direct staff had previously been granted direct access to the benefits IT system. However, the Revenues and Benefits service had reviewed this arrangement when its new benefits IT system was introduced and had decided that access to the benefits IT system was not appropriate for Housing Direct staff. Alternative arrangements were in place to provide Housing Direct staff with limited information about the current status of work in progress.

2.78 There was no service level agreement in place between the Revenues and Benefits service and Housing Direct to provide a framework to:

· govern the standard of service that each party was expected to receive or deliver

· resolve issues of dispute

· ensure that regular meetings took place.

2.79 From June 2004, Sandwell Metropolitan Borough Council will be introducing a council controlled Arms Length Management Organisation. This organisation will manage the council’s housing stock on behalf of the council. Housing Direct will continue to fulfil the landlord responsibilities in respect of the council's housing stock. This arrangement keeps a clear distinction between the council’s strategic housing and landlord responsibilities, with the aim of having more efficient management of the stock and greater tenant involvement. Sandwell Metropolitan Borough Council told us that a draft service level agreement between the Revenues and Benefits service and the Arms Length Management Organisation was in the process of being drawn up.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· develops service level agreements with Housing Direct and the Arms Length Management Organisation that: - govern the standard of service that each party was expected to receive or deliver - resolve issues of dispute - ensure that regular meetings take place.

Procedural guidance

2.80 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.

2.81 Sandwell Metropolitan Borough Council was not at Standard in this element because:

· not all of the procedures provided an accurate and up-to-date guide to actual practice

· staff at each site did not have access to an electronic copy of the procedures manual

· changes were not incorporated into procedures and documentation within 10 days of their receipt by Sandwell Metropolitan Borough Council

· there was no formal management controlled process for developing and changing local procedures.

2.82 Sandwell Metropolitan Borough Council provided procedural guidance to staff and managers in the Revenues and Benefits service through 2 routes:

· central guidance produced by the Department was placed on the Intranet site of the council’s partner

· locally produced procedures were placed on the Revenues and Benefits service’s shared IT network.

2.83 The centrally produced guidance was fully documented and included the Department’s HB and CTB Guidance Manual, circulars and Verification Framework. The guidance covered all aspects of HB and CTB and reflected all current legislative requirements. The Intranet site had been available to all Revenues and Benefits service staff at Intersection House since April 2003 but it was not available to Customer Advisers at the council’s 2 public enquiry counters. However, we were told staff could access a hard copy of this guidance manual.

2.84 Sandwell Metropolitan Borough Council told us the content of the guidance provided on the partner’s Intranet site was monitored by the council's Training and Policy Manager.

2.85 Sandwell Metropolitan Borough Council provided us with copies of some locally produced procedures, including guidance on:

· new and renewal claims

· cancellations

· evidence requirements

· overpayment recovery

· visiting.

2.86 Sandwell Metropolitan Borough Council told us it also had locally produced procedures which were placed on the Revenues and Benefits service’s shared IT network and were available to all Revenues and Benefits service staff. We reviewed the locally produced guidance and found that it was clear and easy to follow. However, some of the guidance made reference to the previous benefits IT system and needed to be updated.

2.87 Sandwell Metropolitan Borough Council told us new guidance was received through circulars issued by the Department. The Training and Policy Manager received a personal copy of those circulars and issued guidance bulletins to staff when necessary. Sandwell Metropolitan Borough Council told us its partner promptly placed the circulars on the Intranet and brought the existence of the new guidance to the attention of users.

2.88 As the Intranet site was not available at the Lodge Road and Oldbury sites, we found the Customer Advisers at those sites had not been kept informed about changes made to the guidance.

2.89 In the absence of a programme of management checking, Sandwell Metropolitan Borough Council had relied on the Training and Policy Manager to ensure that staff and managers understood the guidance that was available on HB and CTB delivery. However, Sandwell Metropolitan Borough Council told us it had no assurance that staff and managers had actually read the procedural guidance.

2.90 Sandwell Metropolitan Borough Council told us the Training and Policy Manager had a high training commitment between April 2003 and the time of our on-site inspection. During that period, the Training and Policy Manager had been engaged in the introduction of the new benefits IT system, training new recruits and the introduction of Pension Credit. For that reason, the Training and Policy Manager had not been able to devote the normal level of attention to the provision of procedural guidance.

2.91 At the time of the on-site phase of our inspection, Sandwell Metropolitan Borough Council told us it anticipated that the Training and Policy Manager would be able to pay greater attention to procedural guidance as training commitments reduced.

2.92 There was no formal management controlled process for developing and changing local procedures. Discussions took place about any proposed change between Revenues and Benefits service staff and management and the Training and Policy Manager issued new guidance, as necessary.

 

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· reviews and revises where necessary locally produced procedures to ensure they provide an up-to-date and accurate guide to actual practice · provides access to its partner’s Intranet site for all staff to ensure that they have access to their own electronic copy of the HB and CTB procedural manual · changes are incorporated into the procedures and documentation for all Revenues and Benefits service staff within 10 days of receipt · introduces a formal management controlled process for developing and changing local procedures.

Management assurance

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

2.94 At the time of our last inspection we found that Sandwell Metropolitan Borough Council:

· had a specialist Monitoring team that aimed to carry out management checks on 10% of all benefit assessments

· carried out management checks on 21% of the benefit assessments in the cases that we examined

· carried out a high level of checking on its counter-fraud work.

2.95 Our last inspection also reported that Sandwell Metropolitan Borough Council had not used the results of its management checking of benefit assessments to inform training and development plans.

2.96 In this inspection, we found Sandwell Metropolitan Borough Council was not at Standard in this element because it did not operate a programme of regular management checks for claims processing as recommended in the Audit Commission’s Countering Housing Benefit Fraud: A Management Handbook (1997).

2.97 Sandwell Audit Services reported in July 2002 that the Monitoring team was no longer checking 10% of benefit assessments because only 2.5 staff were assigned to the team out of a planned complement of 6.

2.98 In the Revenues and Benefits Service Improvement Plan dated
October 2002, Sandwell Metropolitan Borough Council included a proposal to recommence management checking of benefit assessments from
December 2003. Sandwell Metropolitan Borough Council could not tell us why it would take over 12 months to resume the management checks. The planned implementation date was changed to January 2004 while we were on site.

2.99 Sandwell Metropolitan Borough Council confirmed it did not carry out management checks of all benefit assessments. Sandwell Metropolitan Borough Council told us management checks of benefit assessments were only carried out on:

· cases assessed by trainees

· assessments which resulted in payments exceeding £1,000

· cases selected for the mandatory quarterly check required by the Department.

2.100 Sandwell Metropolitan Borough Council told us the errors identified during the checking of the work of trainees were fed back to the individual officers and also summarised and reported to the Training and Policy Manager.

2.101 The long-term absence of a management checking programme for claims processing had resulted in the Revenues and Benefits Manager, the Director of Finance and Business Services and Members having little assurance that the Revenues and Benefits service was being run efficiently, effectively or securely.

2.102 While we were on site, Sandwell Metropolitan Borough Council approved outline arrangements for the re-introduction of management checking of 10% of all benefit assessments from January 2004. Sandwell Metropolitan Borough Council told us the main features of the proposal were:

· 10% of all assessments would be selected by the Monitoring team on the date of assessment

· checks would be carried out by nominated officers from the team that completed the assessment

· checks would be completed before the decision had been notified to the customer

· details of cases checked and findings from the checks would be recorded on a database

· errors found during checks would be fed back to Benefits Processors

· an audit trail of cases checked would be maintained

· the results of the checks for the Revenues and Benefits service would be collated by the Monitoring team

· the findings and results of checks would be reported regularly to senior officers

· the errors found during the checks would be fed through to the Training and Policy Manager.

2.103 We make a recommendation about the need to carry out management checks of benefit assessments in the Processing of Claims section of this report.

2.104 In relation to its counter-fraud work, Sandwell Metropolitan Borough Council told us the Investigations Manager examined 5 open and 5 closed fraud files every 2 months to check the quality of the investigation and to identify training needs. The results of these checks had been recorded centrally by the Investigations Manager. We comment further on this area in the Counter-fraud section of this report.

Management information

2.105 Management information provides a sound base for managers to evaluate the effectiveness and security of the benefits 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 be used simply to generate a local authority’s performance indicators.

2.106 In our last inspection report we recommended that Sandwell Metropolitan Borough Council used the findings from its management checks to inform the training and development of staff.

2.107 Sandwell Metropolitan Borough Council was not at Standard in this element because it:

· did not use internal HB and CTB management information to establish geographical areas within the borough where there was low benefit take-up

· did not use internal HB and CTB management information to establish procedural weaknesses

· had no recognised method to feed performance results into staff training and development plans.

2.108 We were provided with copies of the monthly reports produced by the Investigations Manager to show the work activity and work outstanding for the Benefit Investigation team. The reports were in a standard format and included:

· information about staffing resources and training

· the number of investigations outstanding

· the number of prosecutions and other sanctions.

2.109 Sandwell Metropolitan Borough Council also provided us with copies of monthly management information reports for key areas of benefit administration. The management information in these reports was drawn from the benefits IT system and the electronic data management system and was presented in a standard format.

2.110 Sandwell Metropolitan Borough Council told us the monthly management information reports were discussed at each meeting of its Operational Board. The members of the Operational Board were the:

· Revenues and Benefits Manager

· Business Services Director of the council’s partner

· Operations Manager

· Customer Services Manager

· Development and Monitoring Manager.

2.111 Sandwell Metropolitan Borough Council provided us with copies of operational monitoring reports. The reports provided information about the levels of intake and clearance times of different work types. Sandwell Metropolitan Borough Council told us the main purpose of the reports was to inform its Capacity Plan, a resources planning model. Sandwell Metropolitan Borough Council told us the Capacity Plan was being redesigned during the on-site phase of our inspection and was not being used directly for resources planning purposes at that time.

2.112 However, Sandwell Metropolitan Borough Council told us the operational monitoring reports had been used to facilitate the assessment of work volumes and performance achievements and to identify risks to service delivery.

2.113 Sandwell Metropolitan Borough Council told us it used the management information from the benefits IT system and the electronic data management system to assist with the aim of continuous improvement management in HB and CTB administration. In particular, Sandwell Metropolitan Borough Council had used the information to:

· adjust work priorities and resources allocations

· identify the causes of any deviation from plans or targets.

2.114 Sandwell Metropolitan Borough Council told us it obtained reports from the electronic data management system on a daily basis. These provided information about the levels and types of work that were outstanding. The reports were used by members of the Management team to inform day-to-day decisions about work priorities and resources allocations.

2.115 However, Sandwell Metropolitan Borough Council told us it had not attempted to make use of information from the benefits IT system or the electronic data management system to establish geographical areas within the borough where there was low take-up of HB and CTB.

2.116 Sandwell Metropolitan Borough Council acknowledged that as a result of failing to have a programme of checking benefit assessments, it had no available management information to:

· establish procedural weaknesses

· provide a method to feed performance results into training and development plans.

 

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· uses all management information to identify any geographical area within the borough where there is a low take-up of HB and CTB · introduces procedures to capture the findings from management information on benefit administration work and uses those findings to identify procedural weaknesses · introduces procedures to provide a recognised method to feed performance results into: - individual staff training and development plans - corporate staff training and development plans.

Training and development

2.117 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.

2.118 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.

2.119 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.

2.120 Sandwell Metropolitan Borough Council was not at Standard in this element because it did not provide staff with personal job descriptions containing personal job and work objectives which:

· were aligned with those of the organisation as a whole

· properly reflected the work that the jobholders actually did

· were specific, measurable, achievable, realistic and time-based.

2.121 In our last inspection report we recognised the effort and commitment Sandwell Metropolitan Borough Council had put into training. However, we recommended that Sandwell Metropolitan Borough Council:

…gives the training officer some administrative support to allow more time for training and development of staff.

2.122 During this inspection, we were pleased to see that the Training and Policy Manager had been provided with 2 Training officers. The training responsibilities included providing staff training, reviewing new releases of the benefits IT system software, updating circulars, interpreting benefits legislation and cascading information to staff.

2.123 However, the Training and Policy Manager had been seconded onto the Revenues and Benefits service Modernisation Project team on a full-time basis for 12 months, until September 2003. This project had been a priority for Sandwell Metropolitan Borough Council, but the secondment of the Training and Policy Manager had a significant impact on the amount of training activity that had been provided.

2.124 At the time of our last inspection Sandwell Metropolitan Borough Council had problems with staff recruitment and retention. The council told us during this inspection that it had made real progress in this area, and had recruited around 50 new Revenues and Benefits service staff between April and September 2003. We comment further on the council's recruitment position in the Processing of Claims section of this report.

2.125 The council had a training programme that provided training for new and existing staff. We were told that having recruited so many new staff, many of whom had little or no benefits experience, Sandwell Metropolitan Borough Council had been required to make training for new staff its priority.

2.126 New starters at Sandwell Metropolitan Borough Council attended a 6-week induction course that included corporate induction material as well as benefits training. Following completion of this course, trainees worked on live benefit claims under the supervision of mentors, who checked their work until satisfied the trainees were competent. Interspersed with periods of time working on claims, trainees attended further training modules covering more advanced areas of benefit claims until they had completed the training programme. We were told that it took approximately 38 weeks to complete the full training programme.

2.127 Due to the high volumes of new trainees, we were told that it had not been possible to train them all in every area of benefit claims processing. Certain groups of trainees had received full training, including how to process new applications, but others had been trained only in specific areas, for example, cancellations or changes of circumstances. Training staff told us that the council's aim was for the trainees to receive their outstanding training when possible.

2.128 We were told that existing staff had received training on Pension and tax credits. Overpayments training for all staff was planned but had not been provided due to the priority given to training for new staff. The Benefit Investigation team provided fraud awareness training for new starters during their induction, and annually as a refresher for all Revenues and Benefits service staff.

2.129 Sandwell Metropolitan Borough Council had invested heavily in training. Due to its own limited training resources, due in part to the secondment of the Training and Policy Manager, the council had been required to purchase training from external sources. Sandwell Metropolitan Borough Council's partner had provided a significant amount of training as part of the Revenues and Benefits service partnership agreement.

2.130 Following the introduction of the new benefits IT system, the Revenues and Benefits service needed to undertake considerable staff training in how to operate the system. Due to the secondment of the Training and Policy Manager, and a general lack of training resources within Sandwell Metropolitan Borough Council, the council decided that its partner should provide this training. The software supplier provided initial training to trainers supplied by Sandwell Metropolitan Borough Council's partner. These trainers then delivered the training to the Revenues and Benefits service staff.

2.131 Staff told us the quality of the training provided by the council's partner was poor. Senior officers agreed there had been issues over the quality of the training. Training staff told us that to rectify the problem, they had to teach themselves about the new benefits IT system before retraining staff.

2.132 Sandwell Metropolitan Borough Council issued training evaluation forms to staff attending training courses. We were told the quality and quantity of information received from staff varied. The Training and Policy Manager told us of an intention to introduce an additional evaluation process asking staff how useful the training had proved to be in their jobs. The intention was to use the training database to issue staff with questionnaires one month following the training course. However, we were not provided with any target dates for when this new system would be implemented.

2.133 Prior to the secondment of the Training and Policy Manager, newsletters were produced for Revenues and Benefits service staff to inform them of changes to legislation and provide updates to circulars. These newsletters had not been produced during the secondment. However, we were told they were due to be recommenced.

2.134 Any major changes were communicated to staff in the form of a training course. An example of this was the Pension Credit training that was delivered to staff in advance of the change in assessing benefit claims for pensioners. This training course was tested out on and evaluated by Revenues and Benefits service Team Leaders before being delivered to Revenues and Benefits service staff. We were told that trainers requested feedback from Team Leaders and amended the course content as appropriate.

2.135 In our last inspection report we recommended that the council:

…develop a written training strategy to support the delivery of the overarching Rebates strategy.

2.136 In December 2001, Sandwell Metropolitan Borough Council told the Department that this recommendation would be fulfilled by its Revenues and Benefits service partner delivering its Single Process for benefits to staff between October 2002 and March 2003.

2.137 The Single Process was a framework developed by the council's partner to foster a consistent approach to HB and CTB claims. The framework included:

· organisation

· legislation and regulations

· policies and procedures

· quality system and control

· training

· IT systems co-ordination.

2.138 We were told that Sandwell Metropolitan Borough Council had adopted parts of its partner's Single Process for benefits, on a gradual and incremental basis. The Single Process had been one of 3 major projects for Sandwell Metropolitan Borough Council, the other 2 being the introduction of the electronic data management system, and the introduction of the new benefits IT system. Both of these other projects had been given a higher priority. The council told us it would need to undertake further work before it would be in a position to adopt the Single Process for benefits in full.

2.139 Staff told us that Sandwell Metropolitan Borough Council had benefited from its partnership agreement by gaining access to its partner's Intranet site. The Intranet provided good access for staff to various training materials, including updated circulars and interpretations of legislation. However, as commented on earlier, not all staff could access the Intranet.

2.140 Technical officers in the Revenues and Benefits service provided specialist HB and CTB technical support to staff. Technical officers acted as experts dealing with referrals from staff. Referrals could be passed to the Training and Policy Manager if the Technical officers could not resolve the query. The Revenues and Benefits service structure had 12 posts for Technical officers. At the time of our on-site visit 2 posts were vacant.

2.141 Training staff told us they tried to take the avoidance of backlogs into account when planning staff training. However, the high volume of trainees had made this difficult.

2.142 Sandwell Metropolitan Borough Council issued each member of staff with a job description. However, these job descriptions were generic and did not cover personal job and work objectives. An example of this was the job description covering the role of Revenues and Benefits Officer. We were told that staff would be inducted to cover all areas within their job descriptions over a period of time. However, at the time of the on-site phase of our inspection this had not been done.

2.143 Sandwell Metropolitan Borough Council launched a new Personal Performance and Development scheme for all staff in April 2002. This scheme replaced the previous Employee Development Scheme, and we were told that the new scheme was designed to be much more job related. As the Revenues and Benefits service was implementing its modernisation project at the time the new Personal Performance and Development scheme was launched, we were told that a decision was taken to only conduct very basic Personal Performance and Development scheme discussions with Revenues and Benefits service staff.

2.144 During the on-site phase of our inspection Sandwell Metropolitan Borough Council was involved in carrying out Personal Performance and Development reviews. Staff told us the Revenues and Benefits service was starting to use this review stage to carry out full Personal Performance and Development discussions, and would be issuing staff with personal objectives that could be related back to corporate objectives. Senior officers told us the Personal Performance and Development scheme would ensure that staff received interim and annual feedback from their line manager as well as a formal, written, annual performance appraisal.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· provides staff with personal job descriptions containing personal job and work objectives · ensures that these job and work objectives: - are aligned with those of the organisation as a whole - properly reflect the work that the jobholders actually do - are specific, measurable, achievable, realistic and time-based.

IT

2.145 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.

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

2.147 Sandwell Metropolitan Borough Council was not at Standard in this element because it had not developed documented IT fallback and recovery plans which:

· existed for all aspects of the benefits IT system facilities and were tested at regular intervals

· used the test outcomes to refine and improve the plans.

2.148 Sandwell Metropolitan Borough Council through its Revenues and Benefits service partnership, introduced a new benefits IT system in April 2003. The supply of new, modern software applications was one of the major deliverables under the partnership agreement. The council also implemented a new electronic data management system and a replacement call centre telephone system. Sandwell Metropolitan Borough Council's partner subcontracted the supply of the 3 new systems, remained the focal point for all negotiations, and liaised with the subcontractors on the council's behalf.

2.149 The implementation of the new benefits IT system was a major undertaking for the Revenues and Benefits service. This was only one part of the large scale Revenues and Benefits service modernisation project, several parts of which were ongoing simultaneously.

2.150 Senior officers told us there had been contractual issues between the council, its partner, and the subcontracted software supplier, resulting in a delayed start to the implementation of the system. This delay caused increased pressure and meant that a significant amount of work had to be completed in a shorter timescale to meet the deadline.

2.151 At the time of the on-site phase of our inspection Sandwell Metropolitan Borough Council had been using its new benefits IT system to process HB and CTB claims for approximately 7 months. Staff told us that they were still not able to use the system fully. The reasons for this varied, for example, staff told us they had not received training in certain parts of the system and so were not able to use it. The audit package is one example where we were told this applied. There were also problems with interfaces to other council systems.

2.152 Staff told us of some concerns regarding the systems data. Prior to implementing the new benefits IT system, the data from the previous system had to be cleansed. We were told this was one of the activities that had to be completed more quickly than was desirable due to delays in agreeing contract terms and resultant time constraints.

2.153 Another area of concern was whether the benefits IT system provided sufficient data to ensure that the Department was provided with accurate subsidy returns. Sandwell Metropolitan Borough Council had been trying to obtain assistance and reassurance in this area from its software supplier. We were told that an appointment had been arranged for the end of January 2004, when a consultant from the software supplier would meet with Sandwell Metropolitan Borough Council to try to resolve any issues in this area.

2.154 Unlike the previous benefits IT system, the new benefits IT system required Revenues and Benefits service IT staff to manually intervene to run reports, manage interfaces with other systems and a number of other tasks as it did not do these automatically. IT staff had to run some of these tasks on a daily basis. They were reliant on Revenues and Benefits service Team Leaders completing a spreadsheet detailing the tasks they required to be run.

2.155 Reports could be produced from the new benefits IT system and the electronic data management system and development work had been carried out to extract meaningful information from the various IT systems. However Sandwell Metropolitan Borough Council had made only limited progress in this area at the time of our inspection.

2.156 However, despite these issues, Sandwell Metropolitan Borough Council told us the new benefits IT system had made it easier for Revenues and Benefits service staff to communicate with each other. Information was also more accessible following the implementation of the electronic data management system.

2.157 We were concerned that there were various problems around the benefits IT system providing a secure environment. We were told this had been an area of concern within the Revenues and Benefits service, and something it had been trying to resolve with its partner and software supplier since the system had been installed. The problems included no assurance that:

· XXXX XXXX XXXX XXXX XXXX XXXX XXXX

· XXXX XXXX XXXX XXXX XXXX XX

· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X

· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX

2.158 In its review of its project implementing the new benefits IT system, Sandwell Metropolitan Borough Council documented that:

Our work on systems security commenced too close to the go live date. This resulted in some security issues at go live, which could only be rectified later.

2.159 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX 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 XXXX XX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

· 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 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 XXXX XXXX XXXX XXXX XXXX XXXX XX

· XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX X

2.160 We were told Sandwell Metropolitan Borough Council had requested assistance in resolving these issues from its partner and software supplier. A consultant from the council's software supplier met with Revenues and Benefits service IT staff towards the end of the on-site phase of our inspection.

2.161 Following the on-site phase of our inspection, we were told that problems in relation to user access levels had been rectified, and a new procedure had been introduced to ensure a regular review of user profiles.

2.162 Revenues and Benefits service IT staff operated procedures for the systematic logging of faults, and fault management and correction. The Revenues and Benefits service, through the partnership agreement, received fault management and correction services from its software supplier. We were told there had been some problems with this service, and that this was due to differences in the service level agreement agreed between the council and its partner, and that agreed between the council's partner and the software supplier. The council provided examples where it did not believe it had received the service it was entitled to expect due to different timescales and priorities. This problem had been reported to the council's partner.

2.163 Sandwell Metropolitan Borough Council had produced a list of outstanding issues in relation to its new benefits IT system, and was using this to monitor and track progress. We were told that this was working well. Sandwell Metropolitan Borough Council must ensure that these outstanding issues are proactively managed as several of them had been outstanding for some time at the time of the on-site phase of our inspection. We have already highlighted several examples including the need for consultancy and training in system security and subsidy. Sandwell Metropolitan Borough Council had made requests for assistance in these areas dating back to the implementation of the new benefits IT system in April 2003, but these had not been satisfactorily resolved in November 2003. We were told this was due to the unavailability of consultants.

2.164 We were told the council's partner had produced a draft IT fallback and recovery plan for its IT responsibilities to Sandwell Metropolitan Borough Council, and that this plan was due to be tested in January 2004. Sandwell Metropolitan Borough Council was working on its own draft IT fallback and recovery plan at the time of the on-site phase of our inspection.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· develops documented IT fallback and recovery plans which exist for all aspects of Revenues and Benefits service IT facilities and are tested at regular intervals · uses the test outcomes to refine and improve the plans.

Internal Audit

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

2.166 Sandwell Metropolitan Borough Council was not at Standard in this element because it had not:

· involved Internal Audit in assessing the performance of the Revenues and Benefits service against Performance Standards and had no plans to do so

· developed a procedure to enable Members to ensure that actions taken by responsible managers in response to audit recommendations were taken within timescales indicated in audit reports

· committed a level of Internal Audit resources to HB and CTB audit which was reflective of the monetary value of HB and CTB.

2.167 Sandwell Audit Services provided Internal Audit at Sandwell Metropolitan Borough Council. It produced both an annual and a 5-year strategic audit plan. We were told that Members and the Section 151 Officer approved the plans.

2.168 The plans focused on risks to security and failures in effectiveness. Sandwell Audit Services used a risk assessment model to produce a score for the relative risks posed to individual council services and then awarded services an appropriate risk score. The risk score was based on 5 key risk factors that were weighted to give emphasis to certain factors. For example, control environment was awarded a heavier weighting than management arrangements. Figure 2.6 shows the 5 key risk factors and their respective weightings.

Fig. 2.6: Sandwell Audit Services risk assessment methodology
Risk Factor	Weighting (1=low, 5=high)
Control environment	5
Management arrangements	3
Materiality	5
System complexity	3
Corporate significance	4

Source: Sandwell Metropolitan Borough Council

2.169 The risk assessment approach adopted by Sandwell Audit Services comprehensively considered the risks inherent in the council's services. Examples of risk factors taken into account included:

· results of previous audits and implementation of recommendations

· whether the management structure was clear and whether there was a high turnover of staff

· the value of payments made to customers and the overall budget of the service

· whether the system interfaced with other systems and if the volume of transactions was high

· if the service was bound by complex legislation

· if the service had a high public profile and a high level of Member interest.

2.170 Sandwell Audit Services had assessed the Revenues and Benefits service as high-risk and allocated resources accordingly.

2.171 The council told us that it was revising its risk assessment model as it was developing a corporate risk strategy. Each service area would be expected to provide its own operational risk assessments.

2.172 In our last inspection report we recommended that:

Internal Audit increase its coverage of Benefits to provide greater assurance and reflect the amount of expenditure and degree of risk the service exhibits.

2.173 Figure 2.7 shows that Sandwell Audit Services increased its audit coverage of benefits within the Revenues and Benefits service in 2002/03 to 60 days. We were told that it planned to spend 58 days auditing benefits in 2003/04. At the time of our on-site visit in November 2003, Sandwell Audit Services had spent a total of 3.75 days on the Revenues and Benefits service mainly in an advisory capacity. This left over 54 days not yet used.

2.174 We were told that Sandwell Audit Services planned to carry out its audit of the Revenues and Benefits service in January 2004 and this was expected to take 24 days. Following the audit, Sandwell Audit Services confirmed that it actually spent 39 days auditing the Revenues and Benefits service in January and February 2004.

Fig. 2.7: Sandwell Audit Services activity breakdown
	2000/01	2001/02	2002/03
Total number of Internal Audit days allocated	4,094	4,106	4,085
Total number of Internal Audit days used	3,435	3,005	2,883
Number of Internal Audit days planned on benefits	66	55	55
Number of Internal Audit days used on benefits	41	31	60

Source: Sandwell Metropolitan Borough Council

2.175 Sandwell Metropolitan Borough Council had experienced difficulties with a shortage of resources within Sandwell Audit Services. However, we were told that as the Revenues and Benefits service was a high priority service, its audits had been carried out as planned and had not been affected by the resources problem. Figure 2.7 shows more audit days were spent on the Revenues and Benefits service in 2002/03 than had been planned. However, the reverse was true for 2000/01 and 2001/02.

2.176 In 2002/03 Sandwell Metropolitan Borough Council's HB and CTB expenditure was in excess of £106 million, and therefore 12.5% of its gross revenue expenditure. In comparison, Sandwell Audit Services planned to spend 1.3% of its total audit allocation on HB and CTB, although it ended up spending 2.08% of its total audit days.

2.177 To meet Standard the level of Internal Audit resources committed to HB and CTB audit must be:

· reflective of the risk associated with HB and CTB

· reflective of the monetary value of HB and CTB

· comparable to budget expenditure for other services.

2.178 Although the level of resources committed to HB and CTB audit had been increased since 2001/02 the amount spent on benefits warranted further additional coverage. The resources Sandwell Audit Services planned to commit to the Revenues and Benefits service in 2003/04 was not reflective of the monetary value of HB and CTB.

2.179 Staff in Sandwell Audit Services told us the council did not include an assessment of performance against Performance Standards in its audit of the Revenues and Benefits service. Senior officers at Sandwell Metropolitan Borough Council confirmed this and told us that they did not consider it to be the role of Sandwell Audit Services to assess performance against Performance Standards.

2.180 The Revenues and Benefits service produced and agreed action plans with Sandwell Audit Services following receipt of audit reports.

2.181 Sandwell Audit Services sent summary audit reports to the Finance and Audit Scrutiny Panel and also to the Member with responsibility for the Revenues and Benefits service. Members also received a report every 6 months detailing progress made against recommendations. These reports showed the date by which the recommendation should have been implemented, and if the recommendation had in fact been met. We were told this provided Members with the opportunity to make enquiries of managers who had failed to meet deadlines. While this procedure went some way toward enabling Members to ensure that actions to implement recommendations were taken within timescales indicated in audit reports, the procedure was reactive rather than proactive. There was no guarantee that failure would be prevented.

2.182 At the time of the on-site phase of our inspection Sandwell Audit Services had not audited the Revenues and Benefits service since July 2002 so had not reported whether its recommendations had been implemented. We were therefore unable to test the process fully although we found evidence of recommendations that had not been implemented.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· develops a procedure to enable Members to ensure that actions taken by responsible managers, in response to audit recommendations are taken within timescales indicated in audit reports · ensures that Sandwell Audit Services’ plans include assessing the performance of the Revenues and Benefits service against Performance Standards · commits a level of Internal Audit resources to HB and CTB audit which is reflective of the monetary value of HB and CTB.

External Audit

2.183 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 relating 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.

2.184 Sandwell Metropolitan Borough Council was not at Standard in this element because it did not:

· obtain Members’ endorsement of action plans produced in response to audit recommendations

· report regularly to Members on progress against these plans.

2.185 The Audit Commission provided External Audit to Sandwell Metropolitan Borough Council.

2.186 External Audit carried out an audit of the Revenues and Benefits service at Sandwell Metropolitan Borough Council in 2 stages during Summer 2003. Its report was submitted to Sandwell Metropolitan Borough Council in October 2003. The council had requested that the work be spread over 2 stages as it was heavily involved in the implementation of its Revenues and Benefits service modernisation project. We were told that this was the first major work carried out by External Audit on the performance of the Revenues and Benefits service for several years.

2.187 External Audit told us that there had been a significant effort made by Sandwell Metropolitan Borough Council to improve its Revenues and Benefits service performance, and that Members had taken a considerable interest in the performance of the Revenues and Benefits service.

2.188 We were also told by External Audit that it enjoyed a good relationship with the Revenues and Benefits service and that its recommendations had met with a favourable response. When External Audit had qualified claims, Sandwell Metropolitan Borough Council had accepted this.

2.189 External Audit told us that it also enjoyed a good relationship with Sandwell Audit Services. Sandwell Audit Services had confirmed that both audit services liaised with each other to minimise duplication of work. External Audit told us that Sandwell Audit Services had not historically been very involved in working with the Revenues and Benefits service. However, in the last 2 years it had become more involved. External Audit had never reviewed any of Sandwell Audit Service's work on the Revenues and Benefits service.

2.190 External Audit's report dated October 2003 contained 13 recommendations. Examples of these recommendations included:

· a plan should be developed which details how the projected gap between the workload and available resources, from October 2003, will be bridged

· Management should ensure that the 10% checking requirements are complied with as soon as the Development and Monitoring Team is operational

· Management should ensure that performance data generated by the new Benefits system is validated for accuracy.

2.191 At the time of the on-site phase of our inspection the Revenues and Benefits service had not yet agreed External Audit's recommendations, or made any response to the report.

2.192 Sandwell Metropolitan Borough Council told us that it:

· assessed the implications of audit recommendations and findings

· prepared an action plan in response to the findings

· monitored the progress of the action plan and adjusted it accordingly

· informed Members of the audit findings.

2.193 The report from External Audit in October 2003 was the first report on the performance of the Revenues and Benefits service for several years and as no response had yet been made or any action plan drawn up, we were unable to test the process.

2.194 The Revenues and Benefits service agreed action plans with Sandwell Audit Services and External Audit following their audits. Sandwell Audit Services and External Audit monitored progress against these action plans. Action plans were also discussed during quarterly meetings between the council's Director of Finance and Business Services and the Audit Services Manager. Action plans were incorporated into Revenues and Benefits Service Improvement Plans. Action against Service Improvement Plans was monitored through monthly management meetings. However, we note that discussions regarding progress against the plans were not formally recorded at these meetings. Progress was reported when the plan was updated twice a year.

2.195 Revenues and Benefits service managers told us that there was no procedure in place to obtain Members' endorsement of action plans. There was also no formal mechanism in place to ensure that reports were made regularly to Members on progress against these plans.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· obtains Members' endorsement of action plans produced in response to External Audit recommendations · reports regularly to Members on progress against these plans.

Cost of benefit administration

2.196 There is no definitive costing structure for benefit administration although local authorities should be guided by the provisions contained within the Department’s circular S1/2000.

2.197 Sandwell Metropolitan Borough Council was at Standard in this element because it calculated the cost per claim at regular intervals and used the same costing structure for calculating the average cost per claim each time.

2.198 Sandwell Metropolitan Borough Council calculated the cost per claim using guidance issued by the Chartered Institute of Public Finance and Accountancy, which aims to achieve a reasonable assessment of the cost of assessing a claim for benefit.

2.199 Sandwell Metropolitan Borough Council told us that it based the split of the HB and CTB administration costs between Benefits and Revenues on the advice of the Revenues and Benefits Manager. The Revenues and Benefits service share of the administration cost was divided by the number of HB and CTB claims received in the year to arrive at the average cost per claim.

2.200 In 2001/02 Sandwell Metropolitan Borough Council’s actual cost per claim was £49.23 which placed it in the top quartile of all English local authorities. In 2002/03 Sandwell Metropolitan Borough Council’s average cost per claim had risen to £64.04, which reflected the additional cost incurred in modernising the Revenues and Benefits service including:

· the introduction of the electronic data management system

· the provision of the visiting service and support in the administration of HB and CTB claims by Sandwell Metropolitan Borough Council's partner.

Compliance with the Race Relations Act

2.201 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 have published, 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.

2.202 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.

2.203 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.

2.204 Sandwell Metropolitan Borough Council was not at Standard in this element because it had not:

· actively communicated its race equality scheme to staff

· provided general training to all Revenues and Benefits service staff on their responsibilities within the Race Relations Act

· provided cultural awareness for all Revenues and Benefits service staff aimed at promoting racial equality

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

2.205 In its Race Equality Scheme 2002 – 2005 Sandwell Metropolitan Borough Council described itself as:

a large, multi-cultural, multi-religious and multi-racial Metropolitan Borough Council which lies at the heart of the West Midlands.

2.206 The 2001 census showed that in Sandwell Metropolitan Borough Council's population of approximately 283,000, 20% of residents were from ethnic minority communities. This showed an increase from approximately 15% of the population in the 1991 census.

2.207 The council adopted the Commission for Racial Equality Standard in 1996, and at its last self-assessment in 2001 was judged to have attained Level 3 of the Standard. This meant that:

Results of ethnic monitoring against an Equality Policy and consultation with local communities are used to review overall Council policy and set targets.

2.208 We were provided with employment data for Sandwell Metropolitan Borough Council. This had been collected following ethnic monitoring and showed, for example, the proportion of ethnic minority employees in each job grade. This data was available for the council as a whole, and also within the Finance and Business Services Division. The Finance and Business Services Division employed 601 staff, 103 of whom were from ethnic minority communities. This equated to approximately 17%.

2.209 Sandwell Metropolitan Borough Council had within its Policy and Corporate Governance Directorate, a Race Equality Unit. In June 2003 the unit appointed Race Equality officers attached to each of the council's corporate services who worked alongside the Business Support managers for these services. We were told that this structure had been agreed following prolonged negotiations within the council, and was an improvement on the previous less formal arrangements.

2.210 The council had also set up Corporate Support networks for specific groups who it believed could be subject to disadvantage and discrimination, either in general society or in the council's workplace. Details of these groups could be found in the council's Employee Information Pack. The groups were as follows:

· Corporate Disability Support Group

· Corporate Women's Group

· Corporate and Thematic Black Employee Group.

2.211 The aim of the Corporate and Thematic Black Employee Group was to consult black employees on policies and issues affecting their service areas, taking their opinions and views into account.

2.212 Sandwell Metropolitan Borough Council had produced a race equality scheme. However, at the time of the on-site phase of our inspection this had only recently been formally endorsed by Members and as a result had not yet been actively communicated to all staff. The council told us that the race equality scheme would be published on the council's Intranet although we were not provided with a date when this would happen.

2.213 The race equality scheme needs to be a public document so should be made available to the public through appropriate channels for example, the council's website.

2.214 The council told us that although local action plans had been produced, Members had only recently approved these and they had yet to be implemented.

2.215 We were told the council's corporate Training team provided staff training on the Race Relations Act and cultural awareness. Staff had to be nominated by their team leaders to attend this training. In addition, the staff induction training for new starters included some information on racial awareness. Some staff told us they had not received any training in cultural or racial awareness. The council accepted that not all staff had received training in these areas, and told us this was due to the large turnover of staff.

2.216 Sandwell Metropolitan Borough Council told us it did not conduct an annual review of all facilities provided for customers of key ethnic minority groups in the area.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· actively communicates its race equality scheme to all staff · actively communicates its race equality scheme to the public through appropriate channels for example, the council's website · provides general training to all Revenues and Benefits service staff on their responsibilities within the Race Relations Act · provides cultural awareness for all Revenues and Benefits service staff aimed at promoting racial equality · conducts an annual review of all facilities provided for customers of key ethnic minority groups in the area.

Internal working arrangements

2.217 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.

2.218 Sandwell Metropolitan Borough Council was not at Standard in this element because it did not:

· define the role of those elsewhere in the organisation who were involved in any way with HB and CTB administration

· specify the formal responsibilities of those elsewhere in the organisation who were involved in any way with HB and CTB administration

· specify the internal communications channels that were to be used between all these parties within the organisation

· monitor and regularly review the effectiveness of these arrangements for co-operation and liaison

· publish the results of the monitoring and reviews.

2.219 The working relationship between the Revenues and Benefits service and Housing Direct should be key because of the multiple links between rent income and HB and CTB awards. Staff told us delays in processing HB and CTB claims had a serious impact on the ability of Housing Direct to collect rent and as a result had an adverse impact on the relationship between Housing Direct and the Revenues and Benefits service.

2.220 There was no service level agreement between the 2 services. Sandwell Metropolitan Borough Council was in the process of setting up an Arms Length Management Organisation to manage council homes on its behalf. The Arms Length Management Organisation was due to become operational in June 2004. The council was in the process of drafting a service level agreement between the Arms Length Management Organisation and the Revenues and Benefits service.

2.221 Housing Direct staff told us that out of approximately 36,000 council tenancies, 24,120 (67%) tenants received either full or partial HB awards. Housing Direct relied heavily on the performance of the Revenues and Benefits service and its own performance suffered if there were delays in paying benefit claims. Backlogs in the Revenues and Benefits service had led to problems for Housing Direct. For example, we were told of cases where Housing Direct had instigated eviction procedures against its tenants when a claim had been made for HB but payment had not been made due to the backlog.

2.222 Staff told us that the Revenues and Benefits service had set up liaison meetings with Housing Direct that took place approximately every 6 weeks. These were held at a practitioner level. There were no formal arrangements in place for meetings between senior managers from Housing Direct and the Revenues and Benefits service although we were told that these were arranged when necessary.

2.223 The Revenues and Benefits service had set up a procedure where in cases of potential eviction, staff from Housing Direct could send an e-mail to a Revenues and Benefits service Technical officer who would provide an immediate response.

2.224 Housing Direct had been involved in piloting the electronic benefit claim form initiative at 2 of its local neighbourhood offices at Lion Farm and Blackheath. Housing Direct staff told us they welcomed this initiative and believed it to be working well. We cover this initiative further in the Customer Services section of this report.

2.225 Staff in the council's corporate Customer Relations team told us that the Revenues and Benefits service received the second highest number of complaints in the council. The Revenues and Benefits service and the corporate Customer Relations team needed to work together. Due to problems accessing the Revenues and Benefits service call centre, customers frequently called the corporate Customer Relations call centre to complain. The volume of calls received by the corporate Customer Relations call centre caused problems for this service, as it had not been resourced to deal with so many calls.

2.226 We were told that the corporate Customer Relations team enjoyed a good working relationship with the Revenues and Benefits service but it could still be improved. Monthly liaison meetings had been set up to discuss any problems and we were told these were useful. However, no service level agreement was in place.

2.227 Staff in the Welfare Rights Service told us their relationship with the Revenues and Benefits service had been difficult. Problems encountered included:

· delays in paying HB and CTB caused problems for the Welfare Rights Service and its clients

· difficulty in getting through to the Revenues and Benefits call centre

· Revenues and Benefits service call centre staff not being able to provide the Welfare Rights Service with the specific information it required.

2.228 During the on-site phase of our inspection a meeting took place between the Revenues and Benefits service and the Welfare Rights Service where it was agreed that Welfare Rights staff did not have to go through the Revenues and Benefits service call centre. Access to a dedicated Customer Adviser would be provided and monthly meetings would be held to discuss issues. We were told a service level agreement would be drawn up but this had not been done.

2.229 Staff in the Welfare Rights Service told us they would be getting access to the electronic benefit claim form facility when the pilot exercise was completed. We were also told that they were due to be provided with view-only access to the benefits IT system although no target date for this had yet been agreed.

2.230 The Revenues and Benefits service had made efforts to improve its internal working relationships and progress was apparent.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· defines the role and specifies the formal responsibilities of those elsewhere in the organisation who are involved in any way with HB and CTB administration · specifies the internal communications channels that are to be used between all these parties within the organisation · monitors and regularly reviews the effectiveness of these arrangements for co-operation and liaison · publishes the results of the monitoring and reviews.

External working arrangements

2.231 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.

2.232 Sandwell Metropolitan Borough Council was not at Standard in this element because:

· it only had draft service level agreements with Jobcentre Plus and The Pension Service and these had not been fully implemented

· its service level agreements with all major external stakeholders were not fully compliant with the national models, where a national model existed

· it did not monitor performance against its service level agreements at least annually, taking corrective action as indicated by this monitoring

· it had not formalised by documenting and agreeing its working relationships with other bodies when a service level agreement would not be appropriate

· it did not monitor performance against its agreed working relationships with other bodies at least annually, taking corrective action as indicated by this monitoring.

2.233 At the time of the on-site phase of our inspection the Revenues and Benefits service had a service level agreement in place with the Birmingham Rent Service. This agreement did not comply with the national model agreement, as it required a lower percentage of cases to be referred to the Rent Service within the time limit set out in the national model.

2.234 Sandwell Metropolitan Borough Council told us that neither it nor the Rent Service monitored performance against this service level agreement. This was evident from our sampling of cases, which showed that the average number of working days taken to refer a case to the Rent Service was 72 days. We discuss this area further in the Processing of Claims section of this report.

2.235 The Revenues and Benefits service also had a fraud partnership agreement in place with the Counter-Fraud Investigation Service. This agreement met the minimum requirements of the national agreement. However, there was no mechanism in place to monitor the performance of either Sandwell Metropolitan Borough Council or the Counter-Fraud Investigation Service. We discuss this further in the Counter-fraud section of this report.

2.236 The Revenues and Benefits service had put in place service level agreements with its registered social landlords. However, there was no monitoring of performance against these agreements. We discuss this area further in the Working with Landlords section of this report.

2.237 The Revenues and Benefits service was in the process of implementing service level agreements with both Jobcentre Plus and The Pension Service. However, these agreements were only at the draft stage. Staff told us that the draft agreement with The Pension Service was about to be signed and the draft agreement with Jobcentre Plus was due to be signed in January 2004.

2.238 The Revenues and Benefits service had attended 3 liaison meetings with The Pension Service. Staff told us these had gone well and that as a result The Pension Service was due to hold surgeries at the Revenues and Benefits service enquiry counters in 2004.

2.239 Sandwell Metropolitan Borough Council did not have any formal liaison with the Inland Revenue and had no plans to arrange any liaison meetings. We were told that if there was a problem, staff would ring the Inland Revenue enquiry hotline. The council should implement a Business Partnership Agreement with the Inland Revenue.

2.240 The Revenues and Benefits service had not formalised its working relationship with local branches of the Citizens Advice although a Revenues and Benefits service manager had given a presentation to Citizens Advice staff advising on performance and developments within the Revenues and Benefits service. Staff from Citizens Advice told us they had experienced problems with the Revenues and Benefits service, for example, in getting through to its call centre, and delays in paying HB and CTB claims. The electronic benefit claim form pilot had been rolled out to the Cradley Heath branch of the Citizens Advice, and we were told that this initiative had been welcomed. We discuss this area further in the Customer Services section of this report.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· fully implements its draft service level agreements with Jobcentre Plus and The Pension Service · ensures that its service level agreements with all external stakeholders as a minimum, comply with the national models where they exist · monitors performance against all service level agreements at least annually, and takes corrective action as indicated by this monitoring · formalises by documenting and agreeing its working relationships with other bodies when a service level agreement would not be appropriate · monitors performance against its agreed working relationships with other bodies at least annually, and takes corrective action as indicated by this monitoring · implements a Business Partnership Agreement with the Inland Revenue.

Contractors

2.241 A local authority may choose to outsource aspects of HB and CTB administration through a contractor, and the principles of Best Value requires it at least 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 contractor provides a service that is ineffective and insecure.

2.242 Under section 134(1) of the Social Security Administration Act 1992, HB is to be:

…funded and administered by the appropriate housing authority or local authority.

2.243 And Section 139(1) of the same Act provides that:

…council tax benefit…is to be administered by the appropriate authority.

2.244 In addition to these provisions within the Act, regulation 76(1) of the Housing Benefit (General) Regulations 1987 and regulation 66(1) of the Council Tax Benefit (General) Regulations 1992 state that:

…any matter to be decided under these regulations shall be determined in the first instance by the relevant authority.

2.245 Sandwell Metropolitan Borough Council was not at Standard in this element because:

· its partnership agreement did not contain:

- clear performance targets linked to legal requirements

- incentives for efficient and secure administration

- arrangements for reporting complaints and errors to senior officers and Members

- arrangements for managing the partnership agreement and reporting on its business effectiveness

· it had not assigned trained staff to manage the partnership agreement and undertake checks of at least 10% of decisions made by the partner in each working day.

2.246 In June 2002 following an invitation to tender, a selection process and prolonged negotiation, Sandwell Metropolitan Borough Council entered into a contractual agreement with its partner to outsource various aspects of its Revenues and Benefits service. The partner was contracted to provide the Revenues and Benefits service with the following:

· a replacement benefits IT system

· an electronic data management system

· fault management and correcting services from its software supplier and the production of decision notices, based in Sheffield

· a replacement telephone call centre system

· a visiting service to satisfy the requirements of the Verification Framework

· new desktop computers

· off-site claims processing by a dedicated team of processors specifically dealing with Sandwell Metropolitan Borough Council's benefit claims

· provision of temporary staff to cover vacancies

· a post opening and document scanning service based in Sale, Greater Manchester

· access to the partner's Intranet site and Single Process

· training courses for new entrants and IT training for all Revenues and Benefits service staff.

2.247 The council told us this partnership agreement formed part of its Revenues and Benefits service modernisation project. Various courses of action had been open to the council. However, it felt that the partnership agreement, with the majority of staff remaining as employees of the council, was the best way forward. Agreeing the contract and implementing the partnership agreement was a major undertaking for the Revenues and Benefits service, and it appointed staff to carry out project management as required to lead the changes.

2.248 The partnership agreement was for 5 years covering the period from 2002 - 2007. The agreement was intended to be self-funding, due to savings made, for example, by decommissioning the council's mainframe system.

2.249 The council's partner subcontracted the supply of the replacement benefits IT system, the telephone call centre system, and the off-site electronic data management system. The council's partner was responsible for all contract negotiations with, and service provision by, the subcontracted providers.

2.250 Staff from both the Revenues and Benefits service and its partner told us the partnership was working well. The council held monthly meetings with its partner to discuss service delivery and partnership agreement monitoring. The council's partner also produced a monthly service report providing statistics and details of its performance.

2.251 However, Revenues and Benefits service senior officers told us they were aware that the monitoring currently undertaken was limited, and that more work in this area was required. We were told that this would be the responsibility of the Development and Monitoring team although no target date had been set for the completion of this work at the time of the on-site phase of our inspection.

2.252 Senior officers from the Revenues and Benefits service told us they did not want to create an industry out of monitoring the partnership agreement. However, the level of monitoring undertaken when we were on site was not sufficient and needed to be increased to provide Sandwell Metropolitan Borough Council with assurances that its partner was providing services to quality and standard in accordance with the partnership agreement.

2.253 We were concerned to find that the council undertook no management checks on the claims processing work carried out in Barrow-in-Furness by its partner. The council had no assurance of the quality of the work it was paying for. This is in keeping with the lack of management checking carried out in general by the Revenues and Benefits service as only trainees’ work was being checked.

2.254 We have already highlighted some of the problems encountered in implementing the partnership agreement, for example:

· security access levels in the benefits IT system

· the quality of some of the training

· differences in the IT fault repair service level agreements.

2.255 The council told us that obtaining remedies to some of these problems had taken a considerable amount of time. In October 2003 the Revenues and Benefits service started to document issues and monitor progress of any solutions. For this to work, Sandwell Metropolitan Borough Council needed to ensure it was proactive in chasing progress.

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2.257 Sandwell Metropolitan Borough Council had clearly made significant changes to its Revenues and Benefits service, many of which were as a result of the implementation of its partnership agreement. However, to meet Standard in this element it needs to undertake further improvements as we have recommended below.

Recommendations

We recommend that Sandwell Metropolitan Borough Council:

· ensures that its partnership agreement contains: - clear performance targets linked to legal requirements - incentives for efficient and secure administration - arrangements for reporting complaints and errors to senior officers and Members - arrangements for managing the partnership agreement and reporting on its business effectiveness · assigns trained staff to manage the partnership agreement and undertakes checks of at least 10% of decisions made by the partner in each working day.

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