Section 1:
Introduction

1.1 This report by the Benefit Fraud Inspectorate (BFI) records the results of an inspection of Ellesmere Port & Neston Borough Council’s (EP&NBC) administration of Housing Benefit (HB) and Council Tax Benefit (CTB). The report also considers the measures the local authority (LA) has in place for countering fraud in relation to these benefits.

1.2 The inspection took place during June 1999 and formed part of an ongoing programme of inspections carried out by us. The inspection followed the methodology at Appendix A.

EP&NBC background

1.3 EP&NBC is a District Council and is one of 6 LAs in Cheshire. The LA covers a population of over 80,000. The borough extends from the Mersey to the Dee at the south-western end of the Wirral peninsula and covers an area of approximately 34 square miles.

1.4 The majority of the population lives in the 2 main towns – Ellesmere Port (population 60,740) and Neston (9,320). Much of the remainder of the Borough is covered by the Merseyside Green Belt.

1.5 The Vauxhall car plant and the petro-chemical industry dominate local employment. However, the Borough has been keen to diversify employment opportunities and has helped to bring a number of new developments to the area, including Cheshire Oaks Outlet Village, the Blue Plant Aquarium and a Multiplex Cinema.

1.6 According to data from the Department of the Environment, Transport and the Regions (DETR) and the House of Commons library, the rate of unemployment in the area is less than the national average. Social indices of deprivation indicate that the area as a whole is less socially deprived than average for LAs in England, whereas economic indices show the LA is more economically deprived than average. Data from Cheshire County Council indicates that 17% of unemployed people in the area have been out of work for more than a year.

1.7 The benefits staff are part of the Borough Treasurer’s Department and are located in the Ellesmere Port Civic Centre where a ‘One Stop Shop’ for dealing with claimant enquiries is also located. The staff were deployed as follows:

• 21 staff in the Benefits section
• 6.5 staff in the Enquiries and Overpayments section (E&O)
• one benefits advisor.

1.8 The benefits advisor, who is employed in the Borough Solicitor and Central Services Department, carries out home visits and provides benefit surgeries.

1.9 Total gross administration costs were approximately £282,000 for 1998/99. The average cost of administering benefit in 1997/98 was calculated at £42.69 per claim compared to a national average of £82.17.

1.10 During 1997/98 EP&NBC paid out over £12 million in HB and CTB of which rent rebate accounted for 48% of all benefit paid. Benefits represent approximately 28% EP&NBC’s gross revenue expenditure of around £43 million. The actual benefit expenditure is shown in the following Figure.

Source: EP&NBC

Verification framework

1.11 At the time of the inspection EP&NBC was gearing up for the introduction of the Verification Framework (VF) between January and March 2000. Adopting the VF should further enhance the measures that EP&NBC has in place for preventing fraudulent claims for HB and CTB.

1.12 Further details about the activity of EP&NBC in relation to VF are at Appendix H of this report.