An inspectorate of the Department for Work and Pensions.

Report

Charter Mark - Awarded for excellence

BFI findings

Strategic Management

Fig. 2.1: Results of BFI’s assessment for Strategic Management

Source: BFI inspection assessment

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 level of performance that needs to be achieved for the local authority to be at Standard. BFI’s assessment is the level of performance that has been achieved. Where the assessment score exceeds the Standard score, for example, on ‘cost of claims’, the local authority is performing above Standard.

2.1 Benefits 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

2.2 London Borough of Harrow was not at Standard in this element but could achieve Standard if its vision statement included a commitment to ensure that its Benefits service minimised the barriers to work.

2.3 The Best Value Performance Plan for 2002/03 was London Borough of Harrow’s corporate strategic document, from which all the other council plans were derived. The Best Value Performance Plan sets out London Borough of Harrow’s goals for improvement. This document defined the council’s 5 corporate strategic priorities as:

2.4 The plan also set out the council’s vision, which was:

We will strive for a community:

2.5 London Borough of Harrow also had a mission statement for achieving the vision which was:

To deliver quality and cost effective services through a partnership with stakeholders and the community in general; to govern within a framework of fairness, openness, integrity and accountability.

2.6 The Benefits service is part of Financial and Exchequer services within the Chief Executive’s Department. The Benefits service policy and strategy stated that the strategic vision of the Benefits service was:

The council strives to provide an effective and secure Benefits service, operating efficient procedures in accordance with the HB and CTB regulations, to the standards set in the DWP Performance Standards.

2.7 The strategic vision for the Benefits service was linked to the council’s corporate objectives, and was publicised internally. The Benefits service policy and strategy was supported by the following documents:

2.8 These documents were comprehensive and contained references to the Performance Standards. A cross-party group of Members had reviewed these policy and strategy documents and the portfolio holder endorsed them on behalf of the council while we were on-site.

2.9 To achieve Standard, London Borough of Harrow should include a commitment in the Benefits service policy and strategy to service delivery that minimises the barriers to work and identify ways of promoting this aim.

Recommendations

We recommend that London Borough of Harrow:

· includes a commitment in the Benefits service policy and strategy to provide a service that minimises the barriers to work and identifies ways of promoting this aim.

Policy objectives

2.10 Authorities should support the strategic vision with high level policies and clear objectives for the Benefits service. Together these should:

2.11 London Borough of Harrow was not at Standard in this element because it did not set interim targets for service delivery objectives where a significant improvement in performance was required. However, the authority had:

2.12 To deliver the improvements identified in the council’s Best Value Performance Plan each department of the council had a service plan. The service plan for Financial and Exchequer services had a number of excellent features. In addition to a comprehensive list of service delivery objectives, the plan included:

2.13 Each service delivery objective had a priority ranking and was linked to one of the authority’s corporate objectives.

2.14 The content of the service plan was communicated to staff at an annual launch event, and to raise awareness, staff participated in a quiz on the content of the plan.

2.15 To achieve Standard London Borough of Harrow should set interim targets for the following service delivery objectives:

Recommendations

We recommend that London Borough of Harrow:

· sets interim targets for the following service delivery objectives:

- the average number of days taken to process a new claim for benefit

- the percentage of renewal claims processed on time

- the average number of days taken to process changes of circumstances.

Operational planning

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

2.17 An operational plan for administering HB and CTB translates the Vision, policies and objectives into practical ways of providing a service. Effective operational plans will enable any changes that are required to improve the HB and CTB service to be managed.

2.18 Plans can only be effective if they are developed, used, monitored and adapted to meet changing circumstances. Managers and staff need to be convinced that the plans are realistic and achievable.

2.19 London Borough of Harrow was not at Standard in this element because:

2.20 However, where plans existed they took into account:

2.21 It is important that when major projects are planned the authority appoints a project manager and a team to manage the project. London Borough of Harrow appointed a project manager and a project team for the implementation of the council’s new rent IT system. Senior officers told us that the council planned to appoint a project team in accordance with the council’s corporate project management procedures for the migration to a new benefits IT system.

2.22 At the time of our first inspection in February 2000 London Borough of Harrow had a backlog of work in scanning and indexing and claims processing. At the time of this inspection, the council was up-to-date with scanning and indexing, but it still had a backlog of benefits work.

2.23 London Borough of Harrow has had a backlog of benefit claims since it introduced the Verification Framework in 1999. The council told us that it had previously implemented a number of plans to clear the backlog of work and that these plans had been largely successful. The backlog had, however, never been completely cleared because the budget for additional staff had run out before the task had been completed.

2.24 The Financial and Exchequer services annual report 2001/02, that was available in the reception area advised customers that:

With the backlog cleared we are going to refocus on providing a quality service to claimants. Harrow’s Benefits section will be one of only a handful of Local Authorities in the UK, which are up to date with claims processing and are Verification Framework compliant.

2.25 In our first report, we made a number of recommendations relating to the need for London Borough of Harrow to urgently address the backlog. These included nominating an officer with responsibility for the backlog and drawing up an action plan with key target dates to clear the backlog. However, at the time we were on-site in February and March 2003 there was no documented plan and no targets had been set, although senior officers told us that the following measures were introduced to help address it:

2.26 Senior officers told us that the last time a documented plan existed to clear the backlog was in the summer of 2001, although in an effort to clear the backlog additional staff had also been employed, for different periods, up to November 2002. In our first report we recommended that the backlog was ring-fenced and a dedicated team formed to work on it. Senior officers told us that the backlog had been ring-fenced in the summer of 2000 and a dedicated additional resource employed to work on it, and the backlog had reduced as a result of doing this. At the time we were on-site the backlog was not ring fenced and the Assessment Team was working on both new and old work.

2.27 In June 2002 London Borough of Harrow took the decision to close the Financial and Exchequer services reception and its telephone lines to customers every Wednesday for a temporary period. Members were told that this measure would free up the time of Benefit Assessors and Customer Advisors to process more claims.

2.28 While we were on-site Members agreed to close the reception and telephones permanently every Wednesday as a budget saving measure. We analysed the backlog of work and found that the level of outstanding work was rising. We provide a detailed analysis of the backlog later in this report in Processing of Claims.

2.29 Senior officers told us that they knew the amount of work that London Borough of Harrow was currently processing each week. But no milestones or targets had been set in relation to clearing the backlog of work. Although the authority had measured the gap between the incoming work and weekly output it had not analysed this gap to satisfy itself that it had the necessary resources to clear the backlog.

2.30 London Borough of Harrow told us that the Deputy Housing Benefits Manager, who was appointed while we were on-site, would have responsibility for performance management in the Benefits section.

2.31 The service plan for Financial and Exchequer services contained a number of service delivery objectives to match the performance of the top 25% of English authorities, against the Best Value Performance Indicators, by the end of 2002/03.

2.32 In October 2002, November 2002 and January 2003 the Benefits section did not report its progress against the service delivery objectives. We were told that this was due to staff holidays and the time spent on the collection of information for our inspection.

2.33 The Benefits service had a Best Value improvement plan that was monitored by Members. Six-monthly reports were provided to Members to enable them to monitor progress against the Best Value improvement plan. In addition to these reports, when requested, Members were provided with information about performance against the Best Value Performance Indicators.

2.34 We saw 2 reports to Members from the Head of Financial and Exchequer services that put forward a case for additional resources. One of these reports dated 14 November 2000 related to the recommendations from our first inspection, when we identified the need for additional resources for overpayment recovery and counter-fraud. A further report dated December 2002 related to the need for extra staff to prepare for New Tax and Pension Credits and the implementation of a new IT system. Members had endorsed the recommendations in both these reports.

2.35 To achieve Standard, London Borough of Harrow needs to:

Recommendations

We recommend that London Borough of Harrow:

· develops a documented plan to clear the backlog of claims, with key milestone dates, and monitors the plan to ensure that the backlog is cleared within agreed timescales

· reviews the use of its resources to enable it to achieve a step change approach and clear the backlog of work

· communicates the content of the service plan to all stakeholders

· develops a documented business continuity plan which:

- states how London Borough of Harrow will respond to disruptions that impact on normal HB and CTB delivery

- is tested, at least, annually

- staff know where to find, know who is responsible for which actions, and know what their role is within it.

Performance targets

2.36 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.

2.37 London Borough of Harrow was not at Standard in this element because it did not:

2.38 The Benefits service had linked performance targets to the council’s relevant policy objectives. The service delivery objectives in the service plan included all the relevant Best Value Performance Indicators, providing a baseline against which performance could be measured.

2.39 Performance targets should be reflected in the job descriptions of all benefit staff. London Borough of Harrow’s job descriptions did not contain any of the performance targets although they did specify that the job-holder must:

comply with and maintain levels of service and performance as demanded by service standards and performance indicators.

2.40 Service delivery objectives in the service plan were based on the latest available information about national performance against the Best Value Performance Indicators. London Borough of Harrow is a member of the Lewisham benchmarking club. This enabled it to regularly benchmark performance with comparable local authorities and set appropriate targets. However, the service plan included targets that were unrealistic based on the authority’s current performance. For example, in 2001/02 the authority reported that it decided new claims for benefit in an average of 59 calendar days. Current performance was 78 calendar days and yet it set a target for 2002/03 of deciding 100% of new claims within 35 calendar days.

2.41 We would expect performance targets to be communicated to all relevant stakeholders. Some stakeholders told us that performance was discussed with them but we found no evidence that a formal mechanism existed to communicate performance targets to all relevant stakeholders. Senior officers told us that this information was in the 2001/02 annual report for Financial and Exchequer services which was available in the reception area. However, this did not include any information about performance against local targets or the Best Value Performance Indicators relating to the accuracy of assessments or the recovery of overpaid benefit.

2.42 London Borough of Harrow’s Best Value Performance Plan for 2002/03 stated that it was committed to:

strengthening local communities by promoting social inclusion and seeking to eradicate poverty.

However, there was no related target in the service plan such as increasing the take-up of HB and CTB. Senior officers told us that they had not set any targets for this area of work as the focus was on dealing with the current work.

2.43 The service plan contained a service delivery objective for each section in Financial and Exchequer services to provide a percentage of its service electronically. Senior officers told us that there had been little progress on this issue in the Benefits service. We report further on this in Customer Services.

2.44 London Borough of Harrow would achieve Standard if it:

Recommendations

We recommend that London Borough of Harrow:

· sets service delivery objectives that are achievable and realistic

· includes in the service plan a service delivery objective of clearing the backlog of claims

· links its service delivery objectives to the corporate objective of promoting social inclusion and seeking to eradicate poverty.

Performance monitoring

2.45 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.

2.46 London Borough of Harrow told us that it was not at Standard in this element because of the inability to produce accurate data from its benefits IT system for the Department’s management information returns.

2.47 Senior officers and Members received regular 6-monthly reports on performance including progress against targets in the Best Value improvement plan.

2.48 The service plan provided information on performance management and said that:

All the targets and objectives contained in this service plan will be monitored on a monthly basis. This is essential and it will ensure we are aware of problems as they develop and can take swift remedial action.

2.49 However, as we have already mentioned, performance against the service delivery objectives in the service plan was not reported in October and November 2002 or in January 2003.

2.50 The monthly reports on performance against objectives in the service plan failed to give a clear indication of what had been achieved. The following non-specific terms were often used to report performance:

2.51 London Borough of Harrow told us that it was unable to collect sufficient or accurate management information from its benefits IT system to monitor performance targets. The authority had been in correspondence with the provider of its benefits IT system for some time and the Head of Financial and Exchequer services is a member of the User Group Executive Committee of the benefits IT system provider. Despite these measures it had been unable to resolve these difficulties. Reports produced by the benefits IT system, measuring the time taken to process new and renewal claims for benefit, were not used to measure or report performance against the Best Value Performance Indicators. However, the authority used these reports to complete its management information returns to the Department.

2.52 In each of 3 management returns in 2001/02, London Borough of Harrow had expressed concern to the Department about the accuracy of management information on new claims, renewal claims and overpayments. London Borough of Harrow had explained that its concerns related to the problems that it was experiencing with its benefits IT system software. On each occasion, following contact with the Department, London Borough of Harrow had confirmed that the Department should accept the information provided.

2.53 Since London Borough of Harrow had no confidence in the information produced by its benefits IT system, it used cases selected for management checking to calculate the average time taken to process a new claim. The checking officer counted the number of calendar days taken to decide each new claim. This process was repeated for all new claims checked and the results were then used to calculate London Borough of Harrow’s speed in deciding new claims. However, our analysis revealed that the sample of claims that had been checked always excluded a number of new claims for CTB that had taken longer to process. The results were therefore not an accurate reflection of London Borough of Harrow’s performance as the information submitted to the Audit Commission for the Best Value Performance Indicators suggested that London Borough of Harrow’s performance was better.

2.54 London Borough of Harrow used 2 reports from the benefits IT system to calculate the percentage of renewal claims decided on time. Our analysis of this method found that this did not accurately reflect the authority’s performance because not all of the renewal claims decided were included in the calculation. The authority agreed with our conclusions and immediately stopped calculating performance for new and renewal claims in this manner.

2.55 Figure 2.2 compares the performance against Best Value Performance Indicators reported to the Audit Commission for 2001/02 by London Borough of Harrow with the results produced by the benefits IT system and reported to the Department for the same period.

Fig. 2.2: Reported Best Value Performance 2001/02 compared with benefits IT system data

Best Value Performance Indicators

Reported performance to
the Audit Commission

Benefits IT system reported performance to the Department

Average time taken to process a new claim (days)

59

88

Percentage of renewal claims processed on time %

85.8

38

Source: London Borough of Harrow and BFI analysis

2.56 We met with a cross-party group of 3 Members who told us what information they received about the performance of the Benefits service. Together we identified that they were not being provided with information against the service delivery objectives for the following areas:

2.57 To achieve Standard in this element, London Borough of Harrow should:

Recommendations

We recommend that London Borough of Harrow:

· reviews its current method of calculating performance in processing new and renewal claims and works with its benefits IT system provider to collect accurate data

· ensures that monthly reports of performance against service delivery objectives are made to Members and senior officers

· reviews the information needs of Members and amends reports to include the following:

- the level of outstanding work

- the outcome of management checks

- the number of requests for reconsideration and appeals outstanding

- the time taken to deal with requests for reconsideration and appeals

- the level of overpayments created

- the percentage of overpayments recovered.

Organisational structure

2.58 It is important that human and other resources are used to provide a secure and effective Benefits service. Organisational design will obviously be influenced by council-wide policy on issues such as:

2.59 It is essential that 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.

2.60 London Borough of Harrow was not at Standard in relation to its organisational structure because job descriptions for staff working in the Benefits service did not accurately reflect the work of staff. However, management lines of responsibility within the Benefits service were clear and logical and the service was managed effectively with the Housing Benefits Manager maintaining control over resources.

2.61 Clear lines of communication existed between the Benefits section and other parts of the council involved with HB and CTB administration. We saw agendas for team meetings between managers in Financial and Exchequer services that confirmed this.

2.62 Figure 2.3 illustrates the organisational structure of the sections within Financial and Exchequer services who were involved in benefits administration during the on-site phase of our inspection. These sections were collectively referred to as the Benefits service. Figure 2.4 provides details of the staff under the control of the Housing Benefits Manager and referred to as the Benefits section.

Fig. 2.3: Organisational structure of the Benefits service

Source: London Borough of Harrow

Fig. 2.4: Organisational structure of the Benefits section

Source: London Borough of Harrow

 

2.63 We were concerned that at the time we were on-site the Chief Executive’s re-structure of the council meant that the future location of the Benefits service within the organisation was undecided. The Chief Executive told us that this was due to be resolved by the end of April 2003.

2.64 In our first report we recommended that the authority urgently reviewed the resources for counter-fraud and overpayments. While we were pleased that our recommendations for additional resources for overpayments had been implemented, sufficient resources for counter-fraud had not been allocated. London Borough of Harrow had the same resources to investigate fraud as it had had at the time of the first inspection. The Investigations Team comprised 2 Investigations Officers, an Investigations Assistant and a part-time temporary Investigations Assistant who was covering some of the duties of the Senior Investigations Officer. London Borough of Harrow also employed a temporary fraud Visiting Officer from an agency.

2.65 A Senior Investigations Officer was due to join the team in early April 2003. Senior officers told us that this post had been vacant for over a year and that it had been very difficult to recruit to this post XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX XXXX XXXX XXXX XXXX

2.66 In addition to the Investigations Team, the Assistant Benefits Manager (Investigations) was also responsible for 5 Visiting Officers. Because of the difficulty of recruiting staff these posts were filled by agency staff.

2.67 In our first report we said that the cost of employing agency staff was considerably higher than London Borough of Harrow employing their own staff directly. The Investigations Team had relied on agency staff to carry out investigations by continuing to employ a temporary Investigations Officer since the time of our first inspection.

2.68 Shortly before the on-site phase of our inspection, Members had agreed to a request for the creation of a new Deputy Housing Benefits Manager post and the appointment of additional staff for the impact of Pension Credit. The new Deputy Housing Benefits Manager was appointed while we were on-site.

2.69 To reach Standard, job descriptions would need to accurately define roles and responsibilities of the post holders. Staff working in the Benefits section, the Quality, Systems and Development Team and Support services had a generic element to their job descriptions. In the opinion of senior officers, this afforded them a greater degree of flexibility. However, generic job descriptions had not provided London Borough of Harrow with the flexibility that it considered necessary. Staff told us that in the past potential applicants for posts in the Assessment Team had been reluctant to apply because the job descriptions indicated that they might also be required to work on overpayments or counter-fraud.

2.70 While generic roles applied to each post in the Quality, Systems and Development Team, in practice staff only worked in their area of expertise. This meant that they were unable to cover another officer’s work. An example of this was the inclusion of quality checking in each of the job descriptions for the 6 officers on the Quality, Systems and Development Team. A temporary member of staff from an agency was employed in one of these posts to exclusively perform quality checks on HB and CTB assessments. This was because no other officer on the team had the necessary knowledge to check benefit claims.

2.71 Staff told us that the temporary member of staff had been doing the quality checks for over a year and that attempts to recruit permanently to this post had been unsuccessful. Shortly before we came off-site London Borough of Harrow decided to re-advertise the post at a higher grade.

2.72 To achieve Standard, London Borough of Harrow needs to review:

 

Recommendations

We recommend that London Borough of Harrow:

· reviews all job descriptions and removes the generic element so that job descriptions clearly define roles and responsibilities which accurately reflect the responsibilities of the post

· reviews the use of staffing resources on the Investigations team and re-evaluates the grading of the posts to assist with the recruitment and retention of experienced staff.

Procedural guidance

2.73 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.

2.74 London Borough of Harrow was not at Standard in this element because HB and CTB delivery procedures were not fully documented in manuals and did not contain reference to all of the regulations and circulars. However, the authority provided a wide range of good quality procedural guidance and training notes that were available to benefit staff on the shared computer network.

2.75 London Borough of Harrow had no formal change control process in place for developing or changing local procedures. All proposed changes were initially discussed by benefits managers and any resulting changes were communicated to staff at team meetings.

2.76 To achieve Standard in this element the authority needs to ensure that:

Recommendations

We recommend that London Borough of Harrow:

· makes available to all benefit staff, a comprehensive procedural guide, which includes reference to regulations, circulars, office practice and local policies

· ensures that a formal change control process is in place for the implementation of changes to procedural guidance.

Management assurance

2.77 Members and senior managers accountable for the delivery of effective and secure HB and CTB administration, need assurance that the Benefits service and counter-fraud efforts are working as planned.

2.78 London Borough of Harrow was not at Standard in this element. It operated a system of management checks for claims processing, but it did not have a system of management checks in place for the Investigations Team.

2.79 The level of checking for HB and CTB was only 1.5%, well below the 10% level recommended by Performance Standards and there were no systematic or documented management checks of fraud files. The results of checking were not used to inform training and development of staff and the results of management checks were not reported to Members. Our detailed findings in relation to this issue are reported under Processing of Claims and Counter-fraud where we make a number of recommendations.

2.80 To achieve Standard, London Borough of Harrow should:

Recommendations

We recommend that London Borough of Harrow:

· reports the findings from management checks of benefit assessments regularly to Members

· ensures that the results of management checks inform staff training and development plans.

Management information

2.81 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 current set of performance indicators.

2.82 London Borough of Harrow was not at Standard in this element because it did not use management information to:

2.83 However, assessment team managers used reports from the document image processing system to:

These reports were produced in a standard format at weekly intervals and, when necessary, at more regular intervals.

2.84 Members and senior officers had previously determined what information they wanted to receive and there was evidence that management information was being provided to them. We saw copies of 6-monthly monitoring reports that were provided to Members for performance against the targets in the Best Value improvement plan. However, we identified that Members were not being provided with information on the levels of outstanding work, overpayment recovery performance and accuracy.

2.85 London Borough of Harrow did not use management information to effectively manage its backlog. Reports from the document image processing system were used to inform managers of the work that had been completed at the end of each week and to measure the gap between the incoming work and the number of claims dealt with each week. The difference between the incoming work and the number of claims dealt with each week had not been analysed. This information is crucial for the effective management of the backlog of work.

2.86 Requests for reconsideration of decisions and appeals made by customers were not effectively managed and this resulted in the accumulation of a significant backlog of these cases. Reports available from the document image processing system could have been used to establish areas of procedural weakness that we identified in the authority’s handling of appeals. We report on this area in more detail in Customer Services.

2.87 Management information, available from the council’s telephone system, about calls made by customers to the Benefits section had never been requested. The quality of management information collected about callers at the Financial and Exchequer services reception was poor and was not suitable to be used to inform resource allocation or improvements to the service. We report on this in more detail in Customer Services.

2.88 Management information about the individual performance of benefit staff was collected from the document image processing system and the management checks that were performed. This was not routinely used to inform staff training and development plans.

2.89 To achieve Standard, London Borough of Harrow should:

Recommendations

We recommend that London Borough of Harrow:

· develops and uses a range of management information to:

- predict trends

- identify risks

- identify areas of procedural weakness

- identify areas of low take-up

· ensures that information about individual performance informs training and development plans.

Training and development

2.90 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.

2.91 Investment in the training and development of staff, plays a key role in:

2.92 Investment in performance management can:

2.93 London Borough of Harrow was not at Standard in this element because:

· job descriptions were not tailored to each post

· not all staff had updated job descriptions

· the work objectives referred to in job descriptions were not achievable or realistic

· it did not have a dedicated training resource for training new and existing staff.

2.94 However, London Borough of Harrow had many positive aspects in the area of the training and development.

2.95 Financial and Exchequer services received Investors in People accreditation in 1999 and this was reassessed in January 2003. There was a training programme in place for new and existing staff and all staff received training that covered their main responsibilities.

2.96 Staff received training for new legislation and changes to the Department’s guidance at their team meetings and this training was supplemented by material produced by the Housing Benefits Manager. The training material produced was of a high quality and was made available to all staff. Training sessions were planned to minimise disruption to the service, with training being arranged to avoid busy periods and staff holidays.

2.97 External training providers were employed to supplement local training sessions. Examples of the external training received included:

2.98 In October 2002 London Borough of Harrow made a successful bid for Performance Standards funding and was working closely with another London borough, a recruitment agency specialising in recruiting benefit staff and a private training provider. The project aimed to recruit, train and develop a number of new staff to work in HB and CTB administration. Senior officers told us that the authority had taken on 10 staff as a result of the project and these staff were due to arrive at the end of March 2003. Existing Benefit Assessors would provide support to the new staff during their period of induction with their work being covered by agency staff.

2.99 Financial and Exchequer services had a training and development strategy and each member of staff had a personal training and development plan. Staff received an annual appraisal of their performance and managers provided interim feedback throughout the year.

2.100 According to their job descriptions, officers on the Quality, Systems and Development Team were responsible for providing training to staff. However, the Housing Benefits Manager told us that Quality, Systems and Development officers only provided IT system training. Induction training for benefit staff was provided by one of the Benefit Assessors and the Housing Benefits Manager provided all other benefits training, including the training provided to Housing Management staff.

2.101 The lack of a dedicated training officer for benefit staff resulted in the Housing Benefits Manager spending a considerable amount of time preparing training notes and training staff. We were also concerned about the ongoing provision of training for benefit staff in view of the fact that the Housing Benefits Manager was due to leave the authority in April 2003.

2.102 To achieve Standard in this element, London Borough of Harrow should:

2.103 Since we have made recommendations relating to these areas earlier in this report we only make a recommendation in this section relating to the provision of a dedicated training resource for training new and existing benefit staff.

Recommendations

We recommend that London Borough of Harrow:

· provides a dedicated resource for training new and existing benefit staff.

IT

2.104 Every local authority should make the most 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.

2.105 Automation of processes should enable greater efficiency and reliable and timely management information to monitor performance and inform management decisions.

2.106 London Borough of Harrow told us that it was not at Standard in this element because the benefits IT system was unable to produce accurate management information, there was no interface with the council’s financial systems and the authority had no documented IT recovery plans. We have made recommendations relating to the lack of accurate management information in the section of this report on Performance monitoring and we make a recommendation relating to the need for a documented IT recovery plan later in this report in Internal Security.

2.107 London Borough of Harrow used its benefits IT system to process HB and CTB claims and a fully integrated module for recovering overpayments by sundry debtors invoice.

2.108 The benefits IT system had automatic interfaces with the following systems:

2.109 Shortly before the on-site phase of our inspection, London Borough of Harrow began to use a stand-alone fraud case management IT system. This system had an interface with the benefits IT and the document image processing systems.

2.110 London Borough of Harrow’s benefits IT system provided the necessary reports for the completion of subsidy returns to the Department. However, the data relating to management information was inaccurate. This is covered in more detail under Performance monitoring.

2.111 The benefits IT, the document image processing and the fraud case management systems all provided audit trails and access to these were controlled by passwords. We report on this area in more detail later in Internal Security.

2.112 The Quality, Systems and Development Team was responsible for logging and reporting all IT system faults. Documented procedures existed for this activity and there were detailed records of reported and cleared faults.

2.113 London Borough of Harrow had a dedicated test system for both its benefits IT and document image processing systems. All new releases of software and system fixes were tested on the dedicated test system before they were transferred to the live environment. Documented procedures provided guidance for this area of work and software testing and user acceptance testing were also fully documented.

2.114 Back-ups of the benefits IT and the document image processing systems were made each evening by the council’s IT Section. However, there were no documented contingency or recovery plans for any of the council’s systems. We report on this in more detail in Internal Security.

2.115 London Borough of Harrow will achieve Standard in this element if it:

2.116 We have made recommendations relating to the first point earlier in this report.

Recommendations

We recommend that London Borough of Harrow:

· develops and documents its IT recovery plans

· develops an interface between the benefits IT system and the council’s financial systems.

Internal Audit

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

2.118 London Borough of Harrow was not at Standard in this element because:

2.119 Internal Audit had some areas of good practice and it had a programme of work that:

2.120 Members and senior officers were actively involved in the development of the annual audit plan. This process included a workshop for Members who assisted in the development of the audit plan 2003/04. Once this part of the process was completed the council’s corporate management team approved the plan which was then reported annually to the Overview and Scrutiny Committee.

2.121 The work of Internal Audit was reviewed annually and there was a programme of work that extended over a 3-year period. Senior officers told us that Internal Audit intended to cover Processing of Claims and Working with Landlords in 2003/04 and then 2 functional areas of Performance Standards in each of the following years. We were encouraged to find that Internal Audit had secured its own copy of Performance Standards, was aware of their development and had used them for an audit of the Investigations Team in 2002/03. This audit included a follow-up on the progress of the Investigations Team in implementing the recommendations from our first report.

2.122 Internal Audit told us that its audit coverage was assessed using a structured risk assessment process that was developed with external advice and expertise from consultants. The risk assessment process used in 2002/03 had 10 elements which included:

A risk score was calculated from this process and this was used to determine what was included in the audit plan. The days allocated to each area were determined after consideration had been given to the scope of the work to be undertaken. Figure 2.5 illustrates the internal audit coverage of the Benefits service.

Fig. 2.5: Internal audit – planned and usage of audit days
 

2000/01

2001/02

2002/03

Total number of internal audit days planned

29.5

53

56.5

Total number of internal audit days used

31.9

45.5

38.5

Source: London Borough of Harrow

2.123 Figure 2.6 provides a breakdown of the type of internal audit work that was completed from 2000/01 to February 2003 on the Benefits service.

Fig. 2.6: Internal audit activity breakdown

Area covered

2000/01

2001/02

2002/03 – February 2003

Audit of counter-fraud work

0

0

22

Follow-up of HB and CTB audit

2.5

6

0

Ad hoc advice

6

6

4.5

Key control review

8.7

11.5

2.5

Benefits IT System

0

7

0

Staff checks

1.7

3

5.5

Co-ordination of National Fraud Initiative

13

12

10

Performance Indicators

0

0

12

Total days

31.9

45.5

56.5

Source: London Borough of Harrow

2.124 We were pleased to find that the recommendation in our first report, that a formal process for agreeing action on the recommendations in internal audit reports had been implemented. Draft internal audit reports were discussed with senior officers and the findings agreed. An action plan was drawn up to implement the recommendations and the report published. Progress in implementing recommendations was monitored by Internal Audit with a review the following year.

2.125 In our first report we recommended that procedures were set up to ensure that internal audit recommendations were properly considered and implemented. We also recommended that progress in implementing recommendations was reported to the Chief Executive and Members.

2.126 Internal Audit told us that Members did not monitor the progress against any individual action plans arising from their reports. Senior managers were responsible for ensuring that the recommendations were implemented and any ongoing failures to implement significant recommendations would be reported to Members and could be referred to the Overview and Scrutiny Committee.

2.127 Internal Audit told us that it worked closely with External Audit and discussions with the new external auditor about co-ordinating work programmes took place during the on-site phase of our inspection.

2.128 An internal audit of the Investigations Team in September 2002 had identified a number of issues that were outstanding from our previous report, including the absence of any management checking of fraud files. We report on this in more detail in Counter-fraud.

2.129 In our first report we recommended that internal audit activity in HB and CTB was reconsidered and a minimum annual resource allocation was established. London Borough of Harrow had not addressed this recommendation.

2.130 There had been no internal audit work on the assessment and payment of HB and CTB since an audit in April 1999, although there had been some audit work on Verification Framework visits, system security, management checking and annual coverage of key controls. This lack of coverage is particularly worrying as London Borough of Harrow’s subsidy claims had been qualified since 1999 for the following areas:

2.131 We consider this failure to be a missed opportunity, as work by Internal Audit should have been carried out on these areas to identify if problems had been resolved or if more work was needed to improve performance. As the audit plan for 2003/04 had not been finalised while we were on-site the authority had a chance to address our concerns.

2.132 In its report of the April 1999 audit, Internal Audit expressed concern about the lack of management checks on HB and CTB claims. Internal Audit recommended that management checks should be introduced and management reported that checks had started in June 1999. However, in its follow-up review, published in July 2000, Internal Audit raised issues about the level of management checks that were being undertaken. We asked Internal Audit what further work it had performed on this area and were told that no further testing was undertaken because Internal Audit could not resource it.

2.133 We were concerned that the internal audit resource committed to HB and CTB administration was not reflective of the risk associated with benefits administration. Internal Audit told us that the level of internal audit coverage overall had been benchmarked against other London Boroughs and the authority had been aware that internal audit resource was not equal to many of these other authorities. Internal Audit could not tell us how the authority would resolve this issue as the audit plan for 2003/04 had yet to be finalised.

2.134 To achieve Standard in this element, London Borough of Harrow should:

Recommendations

We recommend that London Borough of Harrow:

· reviews and revises the number of audit days allocated to benefits administration so that it more accurately reflects:

- the risks associated with HB and CTB

- expenditure on other council services

- the monetary value of HB and CTB payments.

· makes arrangements for summaries of all internal audit reports to be made available to Members

· enables Members to monitor action taken in response to internal audit recommendations.

External Audit

2.135 External Audit has statutory duties to 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.

2.136 London Borough of Harrow was not at Standard in this element because Members were not asked to endorse or monitor action plans arising from external audit reports.

2.137 External audit was provided by the Audit Commission in England (District Audit). Shortly before our inspection London Borough of Harrow began the process of changing to a private company for the provision of its external audit services.

2.138 Internal Audit told us that the previous provider, District Audit, utilised and supported the work of Internal Audit by agreeing work programmes and avoiding duplication.

2.139 We saw evidence of good work between External Audit and London Borough of Harrow. For example, an action plan had been prepared to address problems with the reconciliation of benefit payments to the council’s general ledger. District Audit had worked with Financial and Exchequer services to resolve the problems that had led to subsidy claims being qualified in 2000/01 and 2001/02. London Borough of Harrow successfully reconciled benefit payments to the council’s general ledger for 2002/03.

2.140 Senior officers told us that Members were not always informed of the findings of External Audit on the authority’s subsidy claims, or the work that was required to address any qualifications, because action to rectify the claim and provide a response to the Department needed to be taken quickly. However, following our first inspection of London Borough of Harrow an action plan to respond to our recommendations was prepared by senior officers and endorsed by Members. Some external audit recommendations were incorporated into a Best Value improvement plan and progress against the plan has continued to be monitored by Members.

2.141 London Borough of Harrow would achieve Standard if copies of action plans arising from External Audit reports were:

Recommendations

We recommend that London Borough of Harrow:

· arranges for Members to be provided with copies of action plans arising from external audit reports and that Members are asked to endorse these plans

· provides Members with reports to monitor progress against these action plans.

Cost of benefit administration

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

2.143 London Borough of Harrow was above Standard in this element as it calculated the cost per claim at regular intervals, had developed a costing structure and benchmarked performance against similar local authorities.

2.144 In 2001/02 London Borough of Harrow’s cost per claim was £81.07 compared to an average of £64.92 for the top 25% of London boroughs.

2.145 The authority 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. London Borough of Harrow also benchmarked its costs against a number of local authorities.

2.146 The service plan included a service delivery objective of reducing the cost per claim by 4% in 2002/03. Senior officers told us that this objective had been included in service plans for previous years but had not been achieved because the caseload had fallen while the cost of providing the service had continued to rise due to changes in legislation and guidance and work to meet Performance Standards.

Internal working arrangements

2.147 Local authorities need to manage their internal partnerships and relationships to support short and long term policy objectives. Such management includes ensuring that common goals are set for an effective and secure HB and CTB administration.

2.148 London Borough of Harrow told us that it was not at Standard in this element because it did not:

2.149 However, internal stakeholders in Housing Management and the council’s Homelessness Section told us that working relationships with the Benefits section were very good. Examples provided to us of the good working relationship were:

2.150 Staff from Housing Management and the Homelessness Section had received training in forgery awareness and the Verification Framework. This enabled them to collect and verify evidence to support claims for benefit. Documented procedures existed for staff doing this work and refresher training was provided.

2.151 We were pleased to see that the Housing Assessment Team had been provided with indicative rent levels, together with details of above average rents that would result in any property let by a registered social landlord being considered for referral to the Rent Service. Benefit staff told us that Housing Assessment Team staff used this information to help avoid homeless customers taking on a privately rented property that was too expensive.

2.152 Communication channels with departments in the authority were not specified in any written agreement and meetings between the Benefits section and internal stakeholders were not documented. We were provided with a list of items that had been discussed at meetings between Housing Management and benefit staff.

2.153 To achieve Standard, London Borough of Harrow should:

Recommendations

We recommend that London Borough of Harrow:

· documents the internal communication channels that are used between the Benefits section and internal stakeholders

· regularly monitors and reviews the effectiveness of internal working arrangements

· publishes the results of the monitoring.

External working arrangements

2.154 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.

2.155 London Borough of Harrow was not at Standard in this element because of weaknesses in monitoring service level agreements.

2.156 London Borough of Harrow had service level agreements with organisations connected with benefits delivery including:

2.157 In addition, London Borough of Harrow operated a Working Practices Protocol with housing associations in the borough.

2.158 The agreements followed national models where such models were available. London Borough of Harrow did not formally monitor performance against the service level agreements. Regular monitoring with action taken to correct deficiencies would help to improve effectiveness and security. For example, monitoring the time taken to provide information regarding Income Support (IS) or income-based Jobseeker’s Allowance (JSA(IB)).

2.159 In our first report we recommended that:

2.160 We were disappointed that these recommendations had not been implemented.

2.161 There was good liaison between London Borough of Harrow and the other organisations with regular meetings taking place. For example, the liaison contact from Jobcentre Plus visited the Benefits section at London Borough of Harrow each week to discuss and resolve any complex queries. This met the recommendations in our first report when we recommended regular meetings and consideration of alternative arrangements for contact with Jobcentre Plus.

2.162 It is essential that London Borough of Harrow is notified of changes to IS or JSA(IB) entitlement, which will affect HB and CTB claims. To ensure that the relevant cases were identified by the IS and JSA computer systems, a special indicator was attached to the records in those systems.

2.163 We examined the IS/JSA(IB) cases in our new and renewal claims samples to test the extent to which the IS and JSA computer system records had been noted as having an HB or CTB interest. The results are shown in Figure 2.7.

Fig. 2.7: HB/CTB indicators set on IS or JSA system

Type of case

Number where indicator appropriate

Number set and
percentage (%)

New claim

15

12 (80%)

Renewal claim

24

19 (79%)

Total

39

31 (79%)

Source: BFI analysis

2.164 In our first report we recommended that Jobcentre Plus staff were reminded of the importance of setting the HB and CTB indicators correctly on the IS or JSA computer system. The authority told us that it had done this.

2.165 London Borough of Harrow had a procedure in place for informing Jobcentre Plus when it identified a case where the relevant indicator had not been set correctly. However, we saw no evidence that Jobcentre Plus had been informed about the omission in the 8 cases identified in our sample.

2.166 To achieve Standard in this element London Borough of Harrow should produce quarterly monitoring reports that assess performance against the targets in the service level agreements and discuss these reports at regular liaison meetings.

Recommendations

We recommend that London Borough of Harrow:

· produces quarterly monitoring reports for each service level agreement so that it can assess performance against the service level agreements and discuss these reports at regular liaison meetings.

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