§ The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) visit report on Redcar and Cleveland borough council was published on 9 October 2003 and copies of the report have been placed in the Library.
Following the housing Green Paper "Quality and Choice: A Decent Home for All", published in April 2000, the Department for Work and Pensions developed a performance framework for housing benefits. The performance standards for housing benefits allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. They are the standards that the Department for Work and Pensions expects local authorities to aspire to and achieve in time.
The BFI visited Redcar and Cleveland borough council to find out why the council had not regularly submitted performance data to the Department for Work and Pensions as required by the Department.
It was agreed with the council that the normal scope of a BFI inspection would not be suitable, and that the BFI visit would look at the key performance indicators produced by the council and the processes that were intrinsic to the production of its performance data.
The report finds that the council had undergone two major changes since April 2002. It had implemented the verification framework in April 2002 and transferred its housing stock to a private landlord as a large-scale voluntary transfer in July 2002. The BFI's visit concluded that these changes were poorly planned and senior management did not fully anticipate the effect they would have in terms of resources. Consequently they have had a detrimental impact on the benefits business.
22WSAt the same time as these changes, there was considerable uncertainty within the benefits service because the council had started negotiations with a private contractor with a view to contracting-out the benefits service.
These factors caused a backlog of work to build up in August 2002 and this stood at 12,000 items (11 weeks work) at the time of our visit. The report finds that since August 2002, the council's performance in processing new claims to benefit and changes of circumstances had deteriorated significantly. The BFI's sampling showed it had moved from delivering a quick and efficient service to its customers, to one where new claims to benefit and changes of circumstances were taking an average 77 and 44 days respectively to process. However, the latest performance data received by the Department for Work and Pensions indicates that the council's performance is better than this.
The report finds that the council's benefits service used an IT system that was developed in 1987 and which no longer fully supported the business. This had made it difficult for the council to produce the management information required by the Department for Work and Pensions.
In May 2003, the benefits service was contracted out and plans put in place to clear the backlog of work, and also to recruit staff to take the benefits service to full complement. The new contract had been negotiated with the requirement that a new IT system will be implemented before the start of the 2004–05 financial year. In 2002–03, Redcar and Cleveland borough council administered some £38.6 million in housing benefits, about 14 per cent of its total gross revenue expenditure.
The report makes recommendations to help the council address weaknesses and to further improve the administration of housing benefit and council tax benefit.
My right hon. Fri end the Secretary of State is now considering the report and will be asking the council for its proposals in response to BFI's findings and recommendations.