Summary
Introduction
1.1 Local authorities (LAs) pay over £13.7 billion to 4.5 million people on housing benefit (HB) and council tax benefit (CTB), according to the Social Security Departmental Report - The Government’s Expenditure Plans 1999/2000. The National Housing Benefit Accuracy Review 1997/98 estimates that 16% of HB claimants are receiving the incorrect amount of HB, at an estimated annual cost to the taxpayer of £840 million. The government is committed to ensuring that the right money goes to the right person.
1.2 A new contract for welfare: SAFEGUARDING SOCIAL SECURITY sets out the government’s strategy for achieving this. It called for sustained and detailed effort across 4 fronts:
- getting it right – benefit payments should be correct from day one
- keeping it right – ensuring payments are adjusted as circumstances change
- putting it right – detecting when payments go wrong and taking prompt action to correct them with appropriate penalties to prevent a recurrence, and
- making sure things work – by monitoring progress, evaluating the strength of defences and adjusting them in the light of experience.
1.3 The Benefit Fraud Inspectorate (BFI) is an integral part of this strategy. Through our reports on LAs and Department of Social Security (DSS) agencies we aim to:
- identify areas where improvements can be made to benefit administration to raise overall standards
- make recommendations to address weaknesses, and
- identify and spread good practices among administrators.
1.4 This report records the result of our inspection of Burnley Borough Council (Burnley BC). The on-site phase of the inspection took place in late December 1999 and early January 2000.
Getting it right
1.5 The Benefits Service at Burnley BC has been badly affected by a backlog of work that has existed since June 1998. This has led to a significant deterioration in the service provided to HB claimants, particularly in the time taken to process many claims. This situation is unacceptable and urgent action is required to clear these arrears.
1.6 This backlog was made worse by the failure to include the recruitment and training of adequate numbers of staff in the action plan for implementing the Verification Framework (VF) on 1 June 1999. We found that there were gaps in the application of VF by Burnley BC. XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXX. We also found a significant number of cases where a reference to the Rent Officer (RO) was required but where there was no evidence that one had been made.
1.7 We found deficiencies in the claim forms used by Burnley BC, which failed to request evidence of identity, rent or capital. We also found that, following receipt of the claim, further enquiries by Burnley BC were necessary in approximately two thirds of our sample. This indicates serious weaknesses in the effectiveness of the form.
1.8 With over 70% of new claims coming from claimants paying rent to private landlords, we were seriously concerned that Burnley BC had failed to introduce effective liaison arrangements with these landlords. This failing is made worse given that there are:
- indications that these claims represent one of the highest risk categories for this LA
- failures on Burnley BCC’s part to make appropriate referrals to the RO.
Keeping it right
1.9 Burnley BC fails to deal promptly with all notifications of changes of circumstances by claimants. We found that this had caused a number of preventable overpayments of benefit.
1.10 We also found evidence that Burnley BC has difficulties in processing internal review and Review Board cases and that it fails to deal with them within statutory time limits.
Putting it right
1.11 There is no effective management of fraud work at Burnley BC. All referrals are investigated regardless of the strengths or otherwise of the case. Fraud investigations are not monitored for quality and effectiveness. No targets are set for the fraud staff and there are no measures of productivity.
1.12 We found that the quality of investigations was poor and that there is a pressing need for more training and guidance for fraud officers.
1.13 This poor situation has been aggravated by staff absences due to illness and delays in recruiting replacement staff when necessary.
1.14 XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX .
1.15 We found that Burnley BC was failing to act quickly enough on referrals from the National Fraud Initiative (NFI) and the Housing Benefits Matching Service (HBMS). Failure to deal quickly with these referrals can give rise to preventable overpayments and negates the local effect and value of these national initiatives.
Making sure things work
1.16 There has been a considerable backlog of work since June 1998. This has led to unacceptable delays in dealing with many claims. The priority for Burnley BC is to reduce these arrears of work and to do so to a worthwhile timetable. A year of continuous overtime working has failed to achieve this and a recovery plan is needed as a matter of urgency. This plan must address additional staffing resources and milestones for the achievement of specified reductions in the arrears, and for improvements in clearance times. Shortly after the on-site stage of the inspection we were informed by Burnley BC that it had begun to develop such a plan and had obtained approval for the recruitment of the additional staff required for its implementation.
1.17 Burnley BC has an agreed service plan for 1999/2000 which covers the key areas for benefits administration. What this plan lacks is agreed targets and dates with which to monitor progress. These will be essential to an effective recovery plan and should form an integral part of all future service planning.
1.18 The routine collection and analysis of management information is essential to the effective management of benefits operations. Burnley BC does not collect sufficient data for this purpose.
1.19 Although Burnley BC does carry out management checks of the accuracy and security of claims, it needs to check a higher proportion of cases to improve confidence over the security and accuracy of claims, and to provide sufficient data to monitor staff performance effectively and to identify training needs.
1.20 The limited number of management checks, the fact that these cases are referred rather than selected at random, XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XX, combined to raise concerns about internal security. This is particularly worrying given that no internal audit of HB had been completed in the 2 years leading up to this inspection.