Executive summary

Background

1.1 The role of the Benefit Fraud Inspectorate (BFI) is to inspect benefits administration and counter-fraud activity within the Department for Work and Pensions’ agencies and local authorities. The findings from our inspections are reported to the Secretary of State.

1.2 Housing Benefit (HB) and Council Tax Benefit (CTB) are important contributions to many household budgets. Just under 4 million people receive these benefits, including many families with children, and many pensioners. HB and CTB help one in 6 households meet the cost of their housing at an annual cost of £11.5 billion.

1.3 In its response to the Housing Green Paper of November 2000, the Department for Work and Pensions (the Department) agreed to develop a performance framework for HB. BFI played a major role and the new HB and CTB Performance Standards were launched and published in April 2002. They are standards the Department expects local authorities to aspire to and achieve in time. Each local authority was sent a copy of the Standards in 2002, and have since received the revised version. Local authorities are encouraged to complete a self-assessment against them.

1.4 The Performance Standards allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. The Department has chosen to consider the full picture of what constitutes an effective and secure Benefits service, that meets wider strategic objectives, rather than focusing solely on speed and accuracy of processing claims and security. They are Standards the Department aspires to, and expects local authorities to achieve in time.

1.5 How quickly local authorities meet these Standards will depend on the circumstances they face. These include current levels of performance and the level of local and national resources, as well as the effectiveness of change management within the authority itself. The Department has therefore not set a timescale for how rapidly the Standards will need to be met by local authorities.

1.6 This report assesses Wokingham District Council’s administration of HB and CTB against the Performance Standards. The findings in this report should be read in conjunction with the Performance Standards pack, which can be downloaded from the Department’s website, www.dwp.gov.uk.

1.7 In August 1999 Wokingham District Council outsourced its Benefits service, with the exception of fraud investigation work, to an external contractor. We were told that following concern about the performance of the Benefits service, the difficult and unusual decision was taken to bring the service back in-house from July 2002. This report is therefore set in the context of the problems and challenges faced by Wokingham District Council in implementing this decision. In particular the recruitment and training of staff to fulfil all aspects of the benefits delivery process has not been appreciated.

1.8 In the 12 months between bringing the service back in-house and our inspection, Wokingham District Council had successfully restructured the Benefits service and introduced a new Benefits IT system. In July 2002, along with the return of service delivery, it also inherited a backlog of work. Addressing this backlog has been an ongoing constraint for Wokingham District Council making progress. However, its efforts are noted in the Comprehensive Performance Assessment of the Benefits service undertaken by the BFI which identified a range of improvements between July 2002 and August 2003.

1.9 At the time of our on-site work during July and August 2003, Wokingham District Council had not undertaken a full self-assessment against Performance Standards. This BFI inspection has however, assessed Wokingham District Council’s performance against each of the 7 functional areas of Standards.

1.10 We are grateful to Wokingham District Council for its help and
co-operation throughout this inspection.

Overall performance

1.11 Figure 1.1 is a radar graph that provides an illustration of Wokingham District Council’s performance against the Performance Standards’ 7 functional areas. The solid outer line shows the Standard level of performance; the dotted inner line is our assessment of Wokingham District Council’s performance at the time of our on-site inspection during July and August 2003.

Fig. 1.1: Performance against standard

Performance against standards

Source: BFI analysis

This and all subsequent radar graphs show the levels of performance for each of the elements of individual Performance Standards. The Standard score is the number of levels of performance that need to be achieved for the local authority to be at Standard. The BFI assessment is the number of levels of performance that have been achieved. Where the dotted line is outside the solid line, the local authority is performing above Standard.

1.12 Wokingham District Council is performing to a fair Standard in its HB and CTB administration and counter-fraud activities. Although Wokingham District Council had some strengths these were being undermined by a lack of adequate assurance for the security and effectiveness of its processes and systems. A significant number of areas are in need of improvement and Wokingham District Council did not meet any of the 7 Performance Standards.

1.13 The lack of a strategic vision for the Benefits service and absence of Benefits specific policies were contributing to a low profile for the Benefits service within Wokingham District Council. Its management information was limited, and where information was being produced, its messages were not being considered. This meant that performance in key areas was not being effectively reported or monitored. This was compounded by a very limited management checking regime which meant that Wokingham District Council could not provide any assurances about the quality and accuracy of benefit payments being made. Wokingham District Council needs to address these weaknesses urgently to ensure adequate control.

1.14 Our sampling of new and renewal claims confirmed that the gathering of evidence to support a claim was generally good. But lengthy delays in processing were impacting on the quality of service to customers. We noted however, towards the end of the inspection, that backlogs were being reduced and clearance times were improving.

1.15 A lack of written procedural guidance was leading to queries being raised with managers rather than staff being able to find out answers for themselves. This meant managers had limited time to manage operations, or to consider management information reports or the results of management checks. The level of distraction was significant and contributed to the general under-performance of the Benefits section.

1.16 Liaison arrangements with internal sections were poor. This meant that council tenants were not provided with benefits and housing advice at one point of contact. Callers to Waterford House Tenants Services office wanting benefits advice had to go to a separate building where the main Benefits reception was located.

1.17 Wokingham District Council’s arrangements for working with external organisations was an area of particular weakness. It had no active service level agreements with the Rent Service, Jobcentre Plus, Pensions Service or the Department’s Counter-Fraud Investigation Service. Ineffective liaison and joint working were fundamental reasons for poor performance in Rent Officer referrals, speed of adjudication, and joint investigation work.

1.18 Although the level of Internal and External Audit work on the Benefits service was found to be commensurate with the size of workload, a number of audit recommendations had not been implemented. This report recommends an increased level of reporting to Members to ensure progress against Internal and External Audit recommendations is monitored.

1.19 Customers who wished to appeal against the amount of benefit awarded were experiencing delays of over 9 months while they waited for Wokingham District Council to provide a decision. This important area of work had inappropriately been given a low priority.

1.20 Investigations undertaken by Wokingham District Council’s fraud investigation team were generally effective and procedures were in place to consider the most appropriate sanction to apply. However, its lack of active management for adjudication resulted in unreasonable time delays, which in turn affected its ability to prosecute fraudsters. Effective debt recovery on overpayments was similarly being hampered by slow decision making.

1.21 This report recommends that building blocks are put in place to provide a focus on performance management. The key to achieving improvement across all areas lies in Wokingham District Councils managers having the time to assume full control, using available management information and undertaking sufficient checks to provide adequate levels of assurance. Its backlog of work needs to be addressed urgently so that claims processing times can be reduced from an unacceptable level, to meet expectations of reasonable customer service. Wokingham District Council was reducing this at the time of our inspection. We also noted the positive response from Wokingham District Council to our findings and a commitment to address the issues that we raised.

Performance against Standards

1.22 Our assessment of each of the Performance Standards is summarised below.

Strategic Management

1.23 Wokingham District Council is not at Standard. A lack of strategic vision for the Benefits service meant that there was no clear link with Wokingham District Council’s corporate objective of supporting and caring for people who need help. It also lacked Benefits specific policies and written guidance to direct staff in key areas of HB and CTB administration, overpayments and quality checking.

1.24 Wokingham District Council’s working relationships with both internal sections and external organisations were ineffective. Although it had set itself a number of targets for improvement, in part through its Local Public Service Agreement, it had no active service level agreements with any external organisations.

1.25 To achieve this Standard, Wokingham District Council needs to:

· produce a vision statement for its HB and CTB service, supported by strategies and policies to deliver an effective, customer-focused and secure Benefits service

· introduce written procedures and more effective management controls

· introduce service level agreements and partnership arrangements with all its key stakeholders

· co-ordinate its various operational improvement plans into a comprehensive plan for the Benefits service based around the achievement of all areas of Standards over time.

1.26 Undertaking these actions will also directly support improvement of performance in the other 6 areas of Performance Standards.

Customer Services

1.27 Wokingham District Council is not at Standard. A high proportion of telephone callers were unable to get through to the Benefits service. Those who called in person to the office were normally seen promptly, but there was a lack of privacy at the main reception desk.

1.28 There was no effective monitoring of performance for any of the customer service areas. Although some statistics were maintained, apart from telephone callers, these were not comprehensive and meaningful analysis was difficult.

1.29 To achieve Standard, Wokingham District Council needs to:

· continuously measure and improve the service it provides to callers and telephone enquires

· develop a benefits take up strategy

· introduce and systematically monitor the range of customer services targets required by Performance Standards

· comply with the Disability Discrimination Acts 1995 and 1999

· review information materials including leaflets and posters

· review the needs of claimants with special needs.

Processing of Claims

1.30 Wokingham District Council is not at Standard. At the time of our inspection a significant backlog of work including claims to benefits was being tackled by a newly recruited temporary assessment officer. The size of the backlog was estimated as 1,500 items. Wokingham District Council could not provide details of what types of cases were contained in the backlog, but based on our previous experience of mixed work including claims to be processed, and the staffing levels in place, we estimated the backlog as 4 weeks work. Whilst we commend Wokingham District Council’s focus on clearing the backlog we were concerned that no management controls had been put in place.

1.31 Its application of the Verification Framework was effective. However, its speed of processing claims was poor. We were concerned about the possible impact that unreasonable delays were having on existing and potential customers. A lack of management checking meant it did not have adequate assurance that claims processing was being undertaken securely and accurately.

1.32 To achieve Standard, Wokingham District Council needs to:

· develop and implement a documented plan to deal with the backlog of processing work

· use management information to monitor and control workflows, in particular to track progress of new and renewal claims

· introduce management checks across all areas of administration activity to ensure adequate levels of assurance.

Working with Landlords

1.33 Wokingham District Council is not at Standard. It had no established policy for dealings with landlords. Its relationships with the Housing department and private landlords were poor. It had processes in place to deal urgently with claims where there was a possibility of eviction. Direct payments were made to landlords where appropriate and decision notices were issued informing them of their obligations to notify changes of claimants’ circumstances. However it had no effective methods of communicating with its landlords.

1.34 To achieve Standard, Wokingham District Council needs to:

· introduce policies and written procedures covering its liaison with landlords

· provide information materials and liaison activities that will stimulate effective involvement from landlords.

Internal Security

1.35 Wokingham District Council is not at Standard. While its recruitment, document management and payment and accounting procedures were soundly based, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X XXXX XXXX XX

1.36 To achieve Standard, Wokingham District Council needs to review its procedures and processes for XXXX XXXX X to ensure that:

· XXXX XXXX XXXX XXXX XXXX X

· XXXX XXXX XXXX XXXX XXXX XXXX XXX

· management checks are carried out.

Counter-fraud

1.37 Wokingham District Council is not at Standard. Its Investigations team were trained to professional standards that support the delivery of Wokingham District Council’s Sanctions Statement to apply formal cautions and administrative penalties, and refer appropriate cases for prosecution.

1.38 Wokingham District Council needs to review the organisational structure and resources provided for the Investigations team. We found evidence that a number of referrals were not investigated due to limited resources and some investigations involved delays that were attributed to high investigator caseloads.

1.39 Our analysis of a sample of fraud investigation files showed the quality of investigations undertaken was generally good. However Wokingham District Council’s ability to prosecute fraudsters was severely hampered by delays in making adjudication decisions and overpayments being calculated by the Benefits section and Jobcentre Plus. As a result, cases that were otherwise suitable for prosecution had to be abandoned.

1.40 To achieve Standard, Wokingham District Council needs to:

· review its organisational structure to ensure it has sufficient staff resources to investigate all allegations of benefit fraud received

· introduce a counter-fraud business plan

· set individual targets for the number of cautions, administrative penalties and prosecutions it expects to achieve

· review its internal and external working arrangements to prevent delays and improve its chances of achieving successful prosecutions.

Overpayments

1.41 Wokingham District Council is not at Standard. It had no established policy for dealing with overpayments and no written procedures. Although Wokingham District Council had effective processes for recovering benefit debt, it had weaknesses in identifying, calculating and classifying overpayments.

1.42 We had particular concerns that overpayments were being caused due to reported changes not being actioned quickly and that cases involving council error were being wrongly attributed. This has subsidy implications.

1.43 To achieve Standard, Wokingham District Council needs to:

· introduce a benefits specific overpayments policy

· introduce clear written procedures that ensure overpayments are calculated quickly

· set clear monitoring and reporting arrangements.

Wokingham

1.44 Wokingham is in the Royal County of Berkshire and covers an area of 69 square miles (17,892 hectares). It is within 30 miles of the west of London and is bordered by Oxfordshire to the north and Hampshire to the Southwest. The scenery to the south of the District is characterised by miles of mixed woodland and the River Thames forms a natural boundary to the north. Significant housing development has taken place recently in Lower Earley and Woosehill. The District is home to leading technology companies including Microsoft, Panasonic and Oracle.

1.45 Communications within the District are good with the M4 motorway that runs from London to South Wales, running through the centre of the District and the M3 motorway that runs from London to the south coast. Railway links also connect the District with Heathrow and Gatwick Airports as well as London Waterloo Station.

1.46 The current population of the District is estimated at 143,000 and is expected to rise to 148,000 by 2006. Unemployment is below both the national and regional averages at 1.3%. Its ethnic minority population is small, representing 3% of the overall population. Administration of council services is carried out from the town of Wokingham.

1.47 Wokingham District Council operates a Cabinet style of Government and has 54 Members representing 24 wards. The political make-up of the council at the time we were on-site is shown in Figure 1.2.

Fig. 1.2: Political make up in Wokingham District Council
Party	Seats
Conservative	33
Liberal Democrat	20
Labour	1

Source: Wokingham District Council

Benefit expenditure and caseload

1.48 The gross revenue expenditure of Wokingham District Council for 2002/03 totalled £156 million. HB and CTB expenditure for 2002/03 was
£13.1 million, which represents 8.4% of gross revenue expenditure. Figures 1.3 and 1.4 show the benefit spend and the caseload for the years 2000/01 – 2002/03.

Fig. 1.3: HB and CTB expenditure
	2000/01 £	2001/02 £	2002/03 £
Rent Rebate	3,952,431	4,055,264	4,494,054
Rent Allowance	4,519,556	4,957,988	5,756,254
Council Tax Benefit	2,554,078	2,696,301	2,873,396
Total	11,026,065	11,709,553	13,123,704

Source: The Department

Fig. 1.4: HB and CTB caseload
	2000	2001	2002
Housing Benefit	2,548	2,478	2,363
Council Tax Benefit	3,713	3,518	3,295
Totals	6,261	5,996	5,658