Findings
Introduction
2.1 Hart DC is one of 11 LAs in Hampshire. It has a population of 81,000 and covers an area of around 84 square miles. The District has a large rural area with 2 main centres of population in Fleet and Yately.
2.2 At the time of inspection, Hart DC elected Members were split:
- Conservative – 21 seats
- Liberal Democrat – 13 seats
- Non-aligned Independent – one seat.
2.3 Benefits processing has been carried out since September 1999 by a team based in the main council offices in Fleet. The team is part of the Revenues Service, which is in the Finance section. The Revenues Service administers benefits and counter fraud services and also deals with council tax, national non-domestic rates, concessionary fares and sundry debts.
2.4 The team comprised 8 full-time equivalent staff employed in benefits administration and 2 full-time members and a part-time (0.8) member of staff in fraud investigation. These staff report to the Benefits Manager and Client Services Manager respectively. Hart DC told us that it had experienced problems retaining and recruiting experienced staff and recruiting another fraud officer is currently proving to be difficult. The Fraud Manager left in December 1998 and a number of temporary staff were employed during 1999.
2.5 At the time of our inspection, Hart DC’s Revenues Service Manager and Client Services Manager both spent 40% of their time on benefits work. The annual cost of these staff for 1999 was £258,053.
2.6 In 1998/99 Hart DC paid around £5.9 million in HB and CTB to 3,939 claimants, about a third of its gross expenditure. The breakdown of benefit expenditure by type of claim over the last 3 years is shown in Figure 2.1.
| Benefit |
1996/97 (£m) |
1997/98 (£m) |
1998/99 (£m) |
|---|---|---|---|
| Rent rebate |
0.17 |
0.20 |
0.10 |
| Rent allowance |
5.50 |
5.00 |
4.80 |
| HB (total) |
5.67 |
5.20 |
4.90 |
| CTB |
1.60 |
1.00 |
1.00 |
| Total HB/CTB |
7.27 |
6.20 |
5.90 |
Source: 1996/97 from final audited subsidy returns: 1997/98 and 1998/99 - Hart DC
2.7 Figure 2.1 shows that the majority of HB paid out has been in the form of Rent Allowance (RA). Hart DC transferred its housing stock to Hart HA in 1994.
2.8 There are no reliable estimates for the level of error or fraud in Hart DC’s area. However, applying estimates from the National Housing Benefit Accuracy Review 1997/98 would suggest HB losses in the region of £693,941 for 1998/99. As LAs only receive 95% benefit subsidy direct, the cost to Hart DC’s general fund could be as much as £35,000. Further information is in Appendix A.
2.9 The significance of the £693,941 figure is that it sets a potential benchmark against which Hart DC can measure its current performance in detecting benefit fraud and assess the opportunities to improve performance.
2.10 Figure 2.2 illustrates the Weekly Benefit Savings (WBS) claimed by Hart DC compared to its targets from 1996/97 to the last full current financial year, 1998/99. The threshold figure is the target figure set by the DSS for all LAs to encourage them to detect fraud and claim additional subsidy.
| Benefit |
1996/97 (£) |
1997/98 (£) |
1998/99 (£) |
|---|---|---|---|
| RA |
174,708 |
235,875 |
153,705 |
| Rent rebate |
0 |
0 |
0 |
| CTB |
18,842 |
32,700 |
18,615 |
| Income Support |
39,966 |
18,100 |
16,238 |
| Other |
202 |
823 |
4,512 |
| Total WBS claimed |
|||
| WBS threshold |
90,529 |
74,755 |
68,677 |
| Subsidy claimed |
38,060 |
66,409 |
33,884 |
Sources: Audited final subsidy claim 1996/97 & 1997/98: Initial final subsidy claim 1998/99
2.11 These figures highlight the fact that Hart DC has exceeded its threshold in each of the last 3 years but performance fell in 1998/99.
2.12 Hart DC’s WBS performance in 1999/2000 is shown in Figure 2.3.
| 1999/2000 WBS |
Value (£) |
|---|---|
| Threshold |
69,135 |
| 75% of threshold |
51,851 |
| Achieved to December 1999 |
18,933 |
| Potential subsidy penalty |
16,459 |
Source: BFI analysis
2.13 For 1999/2000, the amount of fraud detected by Hart DC falls well short of the threshold in the Subsidy Order. As at December 1999 only 27% of its threshold had been achieved (sampling indicated that 36% of WBS claims for this year are invalid). It is unlikely that Hart DC will reach a level to avoid a reduction in subsidy for 1999/2000. This is largely due to a lack of investigative work being undertaken since April 1999 and a failure to properly staff the fraud section.
2.14 Our findings and conclusions are set out under the 4 elements of the government’s fraud strategy. We examined Hart DC’s performance against the elements by assessing what is being done, recognising whether it meets existing definitions of good practice, whether good practices operate that could be shared more widely and whether there is scope to improve existing performance.
2.15 These conclusions and recommendations follow the benefit process and identify what Hart DC is doing to secure the system from start to finish.
2.16 The factors that affect the way Hart DC delivers benefit can be divided between:
- internal working practices governed by political and strategic concerns
- working relationships with other agencies.
Internal working practices, governed by political and strategic concerns
2.17 Following the very late withdrawal from a compulsory competitive tendering exercise in 1999, Hart DC has had to re-establish many of the processes that it allowed to lapse. But the LA is committed to securing Best Value for the community and has undertaken a preliminary review of the council’s services to determine the position regarding performance monitoring in the light of Best Value requirements. Work has also been carried out to review the corporate plan, including a revised mission statement:
To secure provision for the needs and wishes of the community of Hart DC.
2.18 At the time of the inspection in January 2000, the benefits service stated its commitment to implement VF in April 2000. However, because of the number of other organisational changes that are to be introduced in April, the decision has subsequently been taken to defer this until June.
Working relationships with other agencies
2.19 In the day-to-day processing of claims for HB and CTB it is necessary for Hart DC to make regular contact with the Benefits Agency (BA) and Employment Service (ES) to exchange information. It is essential that Hart DC works closely with these agencies and that there are no barriers to sharing information. To encourage closer working and to formalise the liaison arrangements between agencies, DSS has recommended the use of Service Level Agreements (SLAs).
2.20 The BA District that interfaces with Hart DC on a daily basis is part of AD3, one of 13 directorates within BA. The BA District processes claims to Income Support (IS), Incapacity Benefit, Retirement Pension and other contributory benefits at Aldershot. Jobseeker’s Allowance (JSA) claims are administered at Farnborough and Aldershot. The BA’s Benefits Centre at Makerfield has undertaken all of the District’s overpayment work since April 1998.
2.21 In February 1999, the BFI published a report on the administration of social security benefits within AD3. As part of that inspection we examined the relationship between AD3 and the LAs within its boundary.
2.22 Our concerns then, over the working relationship between AD3 and the LAs, focused on:
- poor liaison arrangements, including the absence of SLAs and monitoring of performance
- the lack of sharing of information on visiting programmes
- QB64/65 procedures (where the LA is informed that proceedings are being considered and providing an opportunity to have its offences included).
2.23 During our on-site inspection we found that BA had made some progress since our last inspection of AD3 and that an SLA now operates between BA and Hart DC. A certificate of performance was awarded for year ending 31 March 1999. But we found that BA had only recently undertaken a monitoring exercise to test its performance against the SLA and the results of this are not yet available.
2.24 We found also that there are opportunities to improve the working relationship between ES and Hart DC and a need to introduce an SLA to encourage closer working.