An inspectorate of the Department for Work and Pensions.

Report

Charter Mark - Awarded for excellence

Security

2.1 It is important that councils have effective measures and processes to prevent, deter and detect fraud. Councils should verify information supplied by customers and reconcile conflicts identified through data matching. Sufficient resources must also be employed to investigate suspected fraud thoroughly and professionally, and appropriate sanctions should be applied.

Security of administration

2.2 This section reports on the arrangements for interventions and the verification of claims. The performance measures are designed to measure the impact of the council’s performance in detecting fraud and error.

Performance measures

2.3 Figure 2.1 shows the council’s own assessment of its 2006/07 performance, as reported to the Department.

Fig. 2.1: Performance measures – Security of administration

Performance measure

Description

Target

Performance 2006/07

Score

PM 10

Number of interventions where review action completed

16,460

16,217

Good

PM 11

% of data matches resolved within 2 months

100

100

Excellent

PM 12

Number of customers visited

5,490

6,698

Excellent

Source: Haringey Council

Performance measure 10 – Interventions

2.4 The council had been on course to achieve its interventions target for 2006/07. However, in October 2006, it discovered that in cases where a change had been identified but not yet fully reassessed, it had reported the intervention as completed. This was incorrect and led to a shortfall on target of approximately 4,000 completed reviews. The error was immediately rectified and postal interventions were substantially increased during the last quarter of the year to make up for the shortfall. By the end of the year, the council had achieved a performance of 98.5%, narrowly missing its target of 100%.

The new Performance measure 10

2.5 In December 2006, the council’s annual target for Performance measure 10 was reduced by the Department from 18,290 interventions to 16,460. This easement was introduced to give councils time to prepare for changes to the measure, which took effect from April 2007.

2.6 The new measure had been designed to encourage councils to:

2.7 We noted that the council had developed an action plan for dealing with the new Performance measure 10. The plan covered all aspects of interventions work and provided details of the necessary action required to drive forward improvement in performance. Initiatives to be implemented in 2007/08 included:

Interventions selection process

2.8 Each month, the Department’s Housing Benefit Matching Service extracts data from the council’s Benefits IT system and scans the data, using a
risk-based scoring methodology, to identify and prioritise cases considered most at risk of fraud and error.

2.9 These cases are then given a priority rating according to risk, ranging from the highest risk 1, to the lowest risk 6. An error code is also provided to help identify the most likely cause of error and the most likely reason for an overpayment, for example, capital or income. The council is then provided with a disk containing a list of risk-scored cases from which it can select cases for review.

2.10 In Haringey, the disk was received by the Claims Assessment manager who arranged for the data on the disk to be entered onto the council’s visiting database. Housing Benefit Matching Service data matches were given to the Fraud Investigation team who selected cases for investigation. High-risk cases were then selected for a visit by the Visiting team. Staff on the General Processing section dealt with the remaining cases.

2.11 No interventions had been carried out by telephone but this is an effective method of dealing with low risk reviews. The council should consider using telephone interventions in these type of cases.

Performance measure 11 – Data matches

2.12 Prior to our inspection, the Department told us that the council had resolved a low percentage of data matches during 2006/07. However, when we discussed this with the council it became clear that an error had been made by the council when submitting data to the Department on its data matching performance and a delay had occurred in rectifying the Department’s records. The Housing Benefit Matching Service confirmed that an error had been made and that the council had, in fact, resolved all data matches referred to it in 2006/07 within 2 months.

Performance measure 12 – Customers visited

2.13 Visiting customers in their home is an effective method of preventing and detecting fraud and error.

2.14 The Visiting team in Haringey was well organised. The team comprised 14 staff but at the time of our visit, there was a vacancy. The post had not been filled immediately, as a review of the team structure was underway because of the new Performance measure 10, and the possible introduction of new technology that would enable Visiting officers to update customer records during the visit. The team was managed by a Team leader who planned the overall visiting programme for the year, set targets and monitored performance. The Senior Visiting officer, assisted by a Support officer, allocated visits to individual Visiting officers.

2.15 The visiting process was well documented in flowchart format and was supported by an effective range of clear and concise letters and reminders sent to customers. The team had exceeded its 2006/07 target for visits by 22%.

Compliance with HB/CTB Security Guidance

2.16 Haringey Council did not meet enablers 17 and 18.

2.17 The council should ensure that a person making a claim to benefit or notifying a change of circumstances produces all of the necessary evidence to support their claim.

2.18 A designated team processed mail addressed to the Benefits service. It was responsible for ensuring that documentary evidence required to support claims to benefit received by post met the requirements of the Department’s HB/CTB Security Guidance. It also scanned copies of verified documents onto the council’s document image processing system.

2.19 An over-the-counter service, enabling customers to submit completed claim forms, notify changes of circumstances and present supporting evidence, was provided at the council’s Customer Service Centres. These were located at:

2.20 Some staff in the council’s Customer Service Centres who were involved in the process of verifying supporting evidence had not been trained to comply with the requirements of the Department’s HB/CTB Security Guidance. However, while we were on-site, the council identified which staff required the relevant training and an external provider had been approached to provide it. We also found that annual refresher training had not been provided.
See recommendation 13.

2.21 To evaluate the effectiveness of the council’s performance in verifying claims, we sampled 12 new claims and 10 changes of circumstances decided during the period 1 October 2006 to 31 March 2007.

2.22 Our sample showed that:

2.23 However, our sampling also showed that:

2.24 When customers provide insufficient evidence at a Customer Service Centre to support a new claim or a change of circumstances, they are asked in writing to produce the required documents. They are also advised of the specific information required and by what date the information should be provided.

2.25 We also found that the requirement for customers to notify the council of changes of circumstances is clearly stated on its HB and CTB claim form.

2.26 Figure 2.2 shows the findings from our new claims sample.

Fig. 2.2: Haringey Council’s performance in verifying new claims

Verification item

Number requiring verification

Number where sufficient evidence held on file

% verified

National Insurance number – customer

12

12

100

National Insurance number – partner

1

1

100

Identity – customer

12

11

92

Identity – partner

1

0

0

Rent liability

12

7

58

Residency

12

11

92

Income – customer

12

7

58

Income – partner

1

0

0

Income –
non-dependants

2

0

0

Capital – customer

12

6

50

Capital – partner

1

0

0

Source: BFI analysis

2.27 In 9 of the 12 sample cases, the council had accepted evidence that had not been verified in accordance with the Department’s HB/CTB Security Guidance. In 6 cases, the council had processed claims without fully verifying the customer’s capital.

2.28 We found 4 claims that had been processed even though the customer had not provided a bank statement. There were also 3 cases where there was evidence of multiple bank accounts held by the customer but the benefits processors had failed to make any enquiries about them.
See recommendation 14.

2.29 We also found:

2.30 In one case, the evidence provided failed to meet the required standard across 7 different areas of the Department’s HB/CTB Security Guidance.

2.31 In our sample of 10 changes of circumstances we found that all of the cases had been verified in accordance with the Department’s HB/CTB Security Guidance.

2.32 In addition to sampling, we also talked to a number of Benefits staff. Our discussion confirmed that they were aware of, and had a good understanding of, the Department’s guidance on evidence gathering requirements. However, not all staff had received refresher training.
See recommendation 14.

2.33 Team leaders undertook weekly quality checks on the work completed by Benefits assessors, and Benefits managers had access to the data obtained from these checks. However, the Benefits managers did not validate checks undertaken by Team leaders. See recommendation 15.

2.34 Our sampling showed contrasting standards of verification within the Benefits service. The results of our sample of new claims indicated a poor standard of verification whilst the results of our sample of changes of circumstances suggested that the standard was very good.

2.35 To improve the standard of verification in new claims and maintain the standard in changes of circumstances the council should introduce:

Compliance with data integrity

2.36 Haringey Council met enabler 19.

2.37 The Department’s Housing Benefits Matching Service confirmed that the council had provided the required data, at the appropriate time, and in the correct format. They also confirmed that 99.05%of the National Insurance numbers of customers recorded on the council’s Benefits IT system matched the National Insurance numbers held by the Department.

2.38 The council was also required to resolve any data incidents, rated 1 and 2 by the Department’s Housing Benefit Matching Service, within 3 months. They confirmed that during 2006/07 no incidents had been outstanding for more than 3 months.

Counter-fraud activities

2.39 This section reports on the council’s efforts to detect and deal with fraud.

Performance measures

2.40 Between April 2003 and March 2007 Haringey council participated in a joint working initiative with the DWP Counter Fraud Investigation Service under the control of a DWP manager. The initiative, named Pathfinder, was designed to assess the benefits of co-locating staff under ‘one-roof’ with a single level of management and common operational objectives.

2.41 Figure 2.3 shows the performance of the Pathfinder team in 2006/07, the final year of the Pathfinder initiative, based on a caseload of 37,200.

Fig. 2.3: Performance measures – Counter-fraud activities

Performance measures

Description

Pathfinder Performance 2006/07

PM 13

Number of fraud referrals per 1,000 caseload

15.58

PM 14

Number of fraud investigators employed per 1,000 caseload

0.19

PM 15

Number of fraud investigations per 1,000 caseload

8.4

Source: Haringey council

2.42 From April 2007, the Fraud Investigation team comprised 2 Special Project officers, 7 Fraud Investigators and a Support officer. The Deputy Benefits and Local Taxation manager had overall responsibility for the team. There was a vacancy for a Fraud Investigation manager. The Special Project officers managed the day-to-day activities of the Fraud Investigation team. There was also a vacancy for a Fraud Investigator.

2.43 When we discussed the vacancy for a Fraud Investigator with the council, we were told that it had been a long-standing vacancy, which had not been filled because of budgetary pressures within the council. We appreciate the financial constraints that councils work under but, if the Fraud Investigation team is to be fully effective in its role of countering fraud, it should be fully resourced and a full time Fraud manager appointed urgently. See recommendation 1.

Enablers

Fraud referrals

2.44 Haringey council met enabler 21 but did not meet enabler 20.

2.45 To enable good quality referrals, Performance Standards require that councils:

2.46 It is important that good quality fraud referrals are received to:

2.47 The council provided its Customer Services and Benefits and Local Taxation staff with an electronic referral form on its document image processing system. However, our sample showed little use of the form. In addition, staff told us that there was another version of the referral form in use, which they found particularly onerous to complete. Guidance on completing the referral forms was limited and it was unclear how widely it had been issued or when it had last been updated.
See recommendation 7.

2.48 Fraud awareness was not included as part of the staff induction process although useful information about how to report fraud was included in the council’s Employee Folder.
See recommendation 7.

2.49 Fraud awareness training had been provided in 2006 and outlined how to make a referral, how investigations were conducted and the roles and responsibilities of Benefit staff in identifying and reporting potential fraud. However, not all staff who should have received the training had been included in the awareness sessions and there was no evidence of monitoring to establish the effectiveness of the training. See recommendation 7.

2.50 The council had recognised that improvements to its fraud referral process were needed and had identified some key tasks in the Fraud Team Work Plan 2007/08 which would address the weaknesses.

2.51 The council subscribed to Fraudwatch. This is a dedicated fraud hotline which is staffed during office hours and has an answering service outside working hours. However, publicity about the service was limited and could be improved, for example, by including the Fraudwatch hotline number in press articles and ensuring that it had a prominent position on the council’s website.
See recommendation 8.

Risk profiling referrals

2.52 Haringey council met both enablers 22 and 23.

2.53 To evaluate the council’s risk assessment process we examined a sample of 20 fraud investigations raised between April 2006 and March 2007. The sample showed that during this time an informal risk-assessment process had been applied to all relevant referrals.

2.54 During the on-site phase of our inspection, the council introduced a formal risk-assessment process, with supporting guidance. The process had been developed using analysis of referrals previously scored on the basis of an informal risk-assessment system. This gave the council assurance that correct weightings had been applied to the new scoring system and that the risk-assessment process would ensure that only referrals scored as a medium or high risk would be accepted for investigation.

2.55 The council confirmed its intention to use the fraud database to conduct future reviews of the risk assessment process and monitor fraud referrals. The reviews would analyse the outcome of referrals, identify trends and build up intelligence.

2.56 Our sample also confirmed that requests for information were made via the Special Project officer who had been authorised to gather intelligence to support investigations. Interviews with investigators confirmed their understanding of the intelligence gathering process.

Action on referrals

2.57 Haringey council met both enablers 24 and 25.

2.58 The Department’s Performance Standards require that referrals should be sifted within an average of 10 working days from receipt and that investigations should be started within an average of 10 working days from the date of the sift.

2.59 Our sample showed that referrals were sifted, on average, in 6 working days, within a range of one to 34 days.

2.60 We accepted the information from the fraud database that showed investigations had commenced within an average of 10 days from the date of the sift. However, we noted that the process that separated the scoring of referrals from the acceptance and allocation of investigations, contributed to delays within the investigation process. See recommendation 10.

Fraud Investigators’ code of conduct

2.61 Haringey council met enablers 26, 27 and 29 but did not meet enabler 28.

2.62 The Fraud Investigation team‘s Code of Conduct for Fraud Investigators clearly sets out the personal responsibilities of the Fraud Investigation officers and the legal framework within which investigations must be undertaken.

2.63 We confirmed that all Fraud Investigation officers were fully accredited in Professionalism in Security, a recognised qualification for Fraud officers.

2.64 Access to fraud files was restricted and there were secure arrangements in place for storing files overnight and when they were not in use.

2.65 Investigators had access to guidance that detailed how a fraud investigation should be documented and how files should be constructed. Our sample showed some good examples of opening minutes, detailed investigator notes and comprehensive closing summaries. However, in 4 (20%) cases customers had been interviewed under caution but the details of the interview were not held on file. This is a breach of the Criminal Procedure and Investigations Act 1996 and its Code of Practice. See recommendation 11.

2.66 It is important that investigators keep a proper record of investigation activity and any evidence gathered during an investigation. These records are an important part of the investigation process and can be used when giving evidence in court. The council used QB50 notebooks for this purpose.

2.67 We confirmed that investigators had access to guidance on how QB50 notebooks should be completed and retained. In addition, the guidance also detailed how and when management checks should take place. However, we found that no management checks had taken place, there was not a secure process for the distribution and retention of the notebooks and completion of them was not in line with the council’s guidance. See recommendation 2.

Interviews under caution

2.68 Interviews under caution should be carried out in accordance with the Police and Criminal Evidence Act 1984 and its Code of Practice where there are reasonable grounds to suspect that an offence has been committed.

2.69 The council had a dedicated conference suite on the top floor of its office at River Park House. The facilities were good and the suite had a number of interview rooms available to conduct interviews under caution. The rooms we inspected were large, quiet and offered privacy.

2.70 In addition to the conference suite, the council had access to interview rooms nearby in the Civic Centre and at the premises of the Social Services. We were told that these alternative locations also offered adequate facilities.

2.71 To support the interview under caution process, the council provided a series of guidance notes for its investigators, which were held electronically on the shared IT network. These included:

2.72 A template had also been developed to help with the planning and preparation stage of the investigation, prior to an interview under caution. This was designed to help establish whether there was any knowledge, action and intent on the part of the suspect and also to address any mitigation offered in defence. Our sample contained cases where the template had been used and, although it had not been used in every case, it was clear that it had been used to good effect.

2.73 Our sample contained 13 cases where an interview under caution had been conducted and the customer was either prosecuted or offered an alternative sanction. We looked at the transcripts of interviews and found that procedures complied with the Police and Criminal Evidence Act 1984 and its Code of Practice, with the exception of one case, which was a joint investigation with the Department.

2.74 In this case, an officer from the council and the Department interviewed the customer. During the interview the customer was repeatedly asked the same question by the officer from the Department but the customer could not provide an alternative answer. This was challenged on a number of occasions by the customer’s solicitor, who was present during the interview. Eventually, the solicitor objected on the grounds that the questioning was oppressive. The officer accepted this, but then attempted to justify the reason for it. This action could be regarded as a breach of sections 76 and 78 of the Police and Criminal Evidence Act 1984. It could have rendered important prosecution evidence inadmissible and may have prejudiced the case had it gone to court.

2.75 Apart from the issues around this particular case, we found that interviews were conducted in a professional manner and the lines of questioning and the structure of the interviews showed a good understanding of the points to prove. The investigators demonstrated a sound knowledge of investigation techniques and the need to comply with legislation. All appropriate documentation was held on the investigation file including appointment letters and copies of all relevant forms provided to the customer at the interview.

2.76 The council obtained transcripts of taped interviews under caution in cases it was taking to court but not where it intended to offer a caution or administrative penalty. There is no legal obligation to provide transcripts in any case although it is considered good practice. Alternatively, an effective summary of interview under caution could be provided instead. However, our sample contained 4 cases where there was neither a transcript nor an adequate summary of the interview under caution on file. This limits considerably the level of assurance on the appropriateness of the action taken in these cases.
See recommendation 11.

The local authority fraud policy

2.77 Haringey council met enablers 31, 33 and 34 but did not meet enablers 30 or 32.

2.78 The council had developed an anti-fraud strategy. However, the strategy was essentially aimed at tackling internal fraud and corruption and only contained one reference to benefit fraud. It was supported by 3 appendices:

2.79 The absence of a high-level strategy, setting out the council’s stance on benefit fraud, meant that the council had missed the opportunity to raise the profile of its Fraud Investigation team and its counter-fraud stance.

2.80 The council’s Sanctions Policy was reviewed in 2003 to complement the Pathfinder initiative, which supported joint working with the Department. This policy was used as a framework to consider whether a prosecution or alternative sanction was the appropriate outcome of an investigation. However, Members had not endorsed the policy and, together with the absence of any high-level counter-fraud strategy, the council had no formal documentation clearly setting out its policy intent. See recommendation 3.

2.81 On an operational level, a Fraud Team Work Plan – 2007/08 had been developed. This contained a series of objectives, including team and individual targets, as well as plans to introduce a number of process improvements. Performance against the team target was monitored and Members received a quarterly presentation from the Deputy Benefits and Local Taxation manager on progress against it. However, we found that there was no comprehensive management checking regime in place. The existing arrangements therefore, provided only limited assurance on the quality and progress of investigations carried out.

2.82 The council had appointed 2 Special Project officers within the Fraud Investigation team with responsibility for the management and control of counter-fraud work. They were expected to review all ongoing investigations every 6 weeks and we were told that there were regular, informal discussions about the direction of individual cases. However, due to competing priorities, we were told that it was not always possible to carry out all of the case reviews. This was evident from our sample where we found delays of over 3 months in progressing investigations without any management intervention.

2.83 The case reviews were designed to minimise delay and provide a management checking function. However, the roles and responsibilities of the Special Project officers in dealing with management checks were unclear and there was no process in place to provide adequate management assurance on compliance with relevant legislation.

2.84 The absence of a formal, comprehensive, quality checking process had been acknowledged and its development was one of the objectives contained in the Fraud Team Work Plan – 2007/08. While we were on site, we were shown a template, which was designed to support this but the details of how and when it would be implemented had yet to be decided. See recommendation 4.

2.85 The council had appointed 6 of its Fraud Investigators with basic authorised officer powers. These appointments were made in accordance with legislation and the details held by the Department were up to date. The Fraud Investigators had received the additional Professionalism in Security training necessary to use the powers, which had been provided by either the Department or a suitably qualified contractor.

2.86 The investigators used their powers to obtain information from employers and landlords as part of the investigation process. In addition, there was a dedicated intelligence-gathering team used to gather information for fast-track investigations identified by referrals from the Department’s Housing Benefit Matching Service.

2.87 Our sample provided examples of cases where investigations had warranted contact with employers and we found that the powers had been used appropriately. All requests for information were accompanied by a code of conduct leaflet and an employers’ guide.

2.88 The council had appointed one of its Special Project officers with the intelligence-gathering role as the nominated officer with extended authorised officer powers under the Social Security Fraud Act 2001. These powers are far reaching and can be used to obtain information from banks and utility companies. The justification for such a request was made on a standard application form. It was then recorded and monitored using a spreadsheet and outstanding requests were followed up.

2.89 We inspected the record and found that, since August 2006, there had been 236 requests made under the extended powers. The spreadsheet showed a surge of requests in October 2006 and again in January 2007. These were accounted for by a large influx of Housing Benefit Matching Service referrals made on the basis of undisclosed capital.

2.90 The council participated in the Royal Mail’s ‘Do Not Redirect’ scheme and used envelopes for its benefits post that were consistent with the specification recommended under the scheme. This ensured that any benefits mail sent to an address with a redirection in force was returned undelivered, directly to the council.

2.91 When undelivered benefits post was received in the council, it was passed to the General Processing section to consider suspending the payment of benefit. Enquiries were then made to establish the reason for the return of the mail, which included the consideration of a home visit. However, there were no procedures in place to ensure that, in cases where fraud was suspected, the matter was referred to the Fraud Investigation team without delay to consider an investigation. A review of this procedure was one of the objectives contained in the Fraud Team Work Plan – 2007/08. See recommendation 12.

2.92 In April 2003, the Parliamentary Under Secretary of State announced his intention to set up a project to assess the advantages of co-location working between the Department and councils. The council was successful in the bidding process and its participation in the Pathfinder initiative became operationally effective from September 2003.

2.93 This brought together the council’s Fraud Investigation team and what was then the Department’s Counter-Fraud Investigation Service, to investigate allegations of HB and CTB fraud and national welfare benefit fraud. This formed a single team, under the control of a manager from the Department, co-located in the council’s premises at River Park House.

2.94 The team comprised 7 Fraud Investigators from the council and 4 from the Department, which also provided clerical support.

2.95 In the early stages of the initiative, the stability of the team was affected by a succession of different managers from the Department who moved on due to promotion. There were also issues around conflicting targets and the absence of an IT link from the council’s office to the Department’s mainframe system. Aside from the IT problem, which was never resolved, the team worked effectively until the initiative ended in March 2007. During 2006/07 it achieved a total of 45 joint sanctions.

2.96 Since the initiative ended, the council and the Department had met to reach agreement on the future of joint working. A fraud partnership agreement had been signed and was modelled on the national framework. However, the agreement did not reflect local working practices and, apart from the residue of cases from the Pathfinder initiative, there was no indication that any joint working had taken place. However, we were told that 7 Living Together cases had been passed to the Department’s Living Together team since April 2007.

2.97 There was no evidence that the agreement was monitored and the spreadsheet designed to exchange information on cases considered suitable for joint working had not yet been used. In addition, there was no information exchanged on cases accepted for investigation in order to prevent duplicate investigations. Unless these issues are addressed urgently then the benefit of the joint working relationship built up during the Pathfinder initiative could be lost. See recommendation 5.

2.98 The council provided its staff with instructions on how to request information from Her Majesty’s Revenues and Customs. All requests were justified on a detailed risk assessment form made through the Department’s Operational Intelligence Unit. We saw evidence of such requests, which contained background details of the case, proportionality and collateral intrusion considerations, and the countersigning manager’s comments in support of the information requested.

Sanctions

2.99 This section reports on the arrangements for the application of sanctions against benefit fraudsters.

Performance measures

2.100 Figure 2.4 shows Haringey council’s sanctions performance based on a caseload of 36,550 in 2005/06 and 37,200 in 2006/07.

Fig. 2.4: Haringey council’s Performance measures – Sanctions

Performance measure

Description

Performance 2005/06

Performance 2006/07

PM 16

Number of successful sanctions per 1,000 caseload

2.33

3.12

Source: The Department and Haringey council

2.101 Figure 2.5 shows the breakdown of sanction activity.

Fig. 2.5: Haringey council – Sanctions by type
 

2004/05

2005/06

2006/07

Cautions offered and accepted

23

29

77

Administrative penalties offered and accepted

32

31

29

Prosecutions

24

25

10

Total

79

85

116

Source: The Department and Haringey council

2.102 The figures show that the council made a steady improvement in the total number of sanctions and prosecutions achieved over the last 3 years. The sanctions target of 112 was exceeded in 2006/07 and the target for 2007/08 was increased to 126. This represented an individual target of 18 for each investigator.

2.103 However, the figures also show that there was a 62% increase in the number of cautions offered and accepted during 2006/07, compared with the previous year, and a 60% reduction in the number of prosecutions over the same period. By the end of the third quarter of 2006/07 the council had only achieved 65 sanctions against its annual target of 112.

2.104 The reason for the increase in cautions offered could lie in the speed at which this type of case could be progressed in order to meet the overall sanctions target. In the last quarter of 2006/07, the council offered 45 cautions out of its annual total of 77 but in the same period, it only produced one prosecution, out of its annual total of 10.

2.105 We were told that a contributory factor in the imbalance was that, in October 2006 and January 2007,the council had investigated a high number of undisclosed capital cases, referred to it by the Department’s Housing Benefit Matching Service. These contained a number of elderly customers that the council did not wish to prosecute and many were offered an alternative sanction instead which was not consistent with its sanctions policy.

2.106 In March 2007, because of delays by the Department in calculating the amount of benefit overpaid, the council withdrew from 12 ongoing joint prosecutions with the Department in favour of progressing alternative sanctions by itself.

2.107 We found that the council was proactive in publicising benefit fraud cases that were taken to court and saw some examples of press cuttings, which had been used to help raise the profile of the council’s investigation work. There was an effective relationship between the local media and the council’s press and publicity officer and press releases were used to generate publicity.

Performance enablers

A balanced sanctions policy

2.108 The council met enabler 37 but did not meet enablers 35 or 36.

2.109 Councils should provide clear guidelines that support the decision to prosecute cases of benefit fraud and where a caution or administrative penalty is offered as an alternative.

2.110 The council reviewed its sanctions policy to align it to the one used by the Department but adapted the financial threshold for considering prosecution action in the first instance. This was increased to £5,000, because of the high level of private sector rent charged in the area. Below this amount, the policy said that the offer of a caution or administrative penalty could be considered as an alternative. The policy also stated that each case should be considered on its own merits and the application of Public Interest test, contained in the Code for Crown Prosecutors, should be applied.

2.111 We selected a sample of 9 cases where sanctions had been carried out. The files were well constructed and easy to follow with all appropriate witness statements and evidence contained on the file. We examined them to establish whether or not the council’s sanctions guidance had been applied consistently. Our findings are set out in Figure 2.6.

Fig. 2.6: Sanctions applied in sample cases

Case number

Sanction

Overpayment
(£)

Consistent with policy
(Yes/No)

Decision formally endorsed
(Yes/No)

1

Caution

24,764

No

Yes

2

Caution

16,779

No

Yes

3

Administrative penalty

18,727

No

Yes

4

Caution

11,641

No

Yes

5

Caution

7,350

No

Yes

6

Caution

3,028

No

Yes

7

Administrative penalty

16,241

No

Yes

8

Administrative penalty

3,859

Yes

Yes

9

Prosecution

15,080

Yes

Yes

Source: BFI analysis

2.112 Our sample showed that the council had not adopted a consistent approach when it considered the appropriate sanction to apply. Although sanction action had been endorsed by the Special Project officers, with the exception of one joint case authorised by the Pathfinder manager, in 7 out of 9 cases the action taken was not in line with the council’s sanctions policy. In addition, we also found one case where the offer of a caution was made on the basis that the customer had admitted the offence when it was clear that they had not.

2.113 Cautions were introduced to deal with minor offences, but our sample contained cases where the fraud overpayments were substantially greater than the £5,000 prosecution threshold set by the council. In these cases, a prosecution should have been the first consideration. Even taking into account the flexibility built into the sanctions policy, the extent of the overpayments, and the periods of time involved, in one case over 6 years, the offer of a caution was difficult to justify.

2.114 The sample contained cases where there was no clear documentation setting out the reason for the action taken. In others, health or age considerations were cited as public interest factors for not taking prosecution action, but then the offer of a caution or administrative penalty was made instead. However, the offer of a caution or administrative penalty is made as an alternative to prosecution and should only be considered in cases where the council would be prepared to take the case to court. This was in complete contrast to some of the actions taken in our sample cases.

2.115 The sanctions policy was complicated with numerous clauses outlining the appropriate action to take but this had not translated into decisions that were consistent and easy to back-up. The policy should, therefore, be reviewed and simplified and approval of the revised policy sought by Members.
See recommendation 6.

2.116 Our sample showed that the council used the appropriate forms in all cases to check the Department’s database for previous benefit fraud. However, due to an oversight, it had failed to check the Police National Computer for criminal convictions before the offer of a caution was considered. This meant that in cases where cautions had been offered, the appropriateness of that course of action could have been incorrect if the customer had a criminal conviction.

2.117 We were pleased to find that the council routinely notified the Department of all cases where the offer of a sanction had been accepted or a conviction had been sustained.

2.118 The council’s guidance on dealing with sanctions states that, in the event that a caution or administrative penalty is refused, then the case should be considered for prosecution and, therefore, the same standard of evidence should be obtained. The council told us that it had pursued one case to court where a caution had been refused. This was consistent with the council’s policy intent but it should be mindful of the cases we found in our sample where a decision was made to offer an alternative sanction because it was not in the public interest to take such cases to court. Should the alternative have been refused in these cases, the policy intent to prosecute may have been difficult to carry out.

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