Benefit Fraud

HC Deb 22 October 2002 vol 391 cc131-41W

Paul Goggins

To ask the Secretary of State for Work and Pensions if he will make a statement about the inspection report of the Benefit Fraud Inspectorate in respect of Cherwell District Council. [76871]

Malcolm Wicks

The Benefit Fraud Inspectorate's (BFI) inspection report on Cherwell District Council was published on 19 September 2002 and copies of the report were placed in the Library.

The BFI finds that the council had implemented improvements since its Best Value Review and the BFI Best Value inspection in October 2001. The introduction of a customer service team has had a positive impact on claims processing speed as this team deals with all telephone enquiries from claimants, which allows processing of claims without interruption. The council had set challenging targets to answering telephone calls quickly and BFI found the service to be efficient.

The report identifies a number of strengths and good practices. The council is commended for the high standard of verifying claims for benefit, recording the required evidence to support the claim and using efficient procedures to control and monitor claims.

The council has effective mechanisms for the identification, classification and recovery of overpayments and is commended for its use of management information for monitoring performance. However, the report notes that a number of cases sampled had been incorrectly classified. The council is recommended to use its powers to recover debt in all appropriate cases to improve the rate of recovery.

The council is also commended for its partnership approach to long-term strategies. The Community Plan has been produced with 15 public, private and voluntary sector organisations after extensive consultation with local people.

The report recognises the council's commitment to fraud prevention, deterrence and detection. Fraud awareness among benefit staff is high and this is reflected in the number of high quality fraud referrals that benefit staff make to the council's fraud investigators.

BFI expresses concern with the lack of management checks on IT security. The council has responded positively to this and has taken immediate steps to rectify the situation.

Paddy Tipping

To ask the Secretary of State for Work and Pensions if he will make a statement about the inspection report of the Benefit Fraud Inspectorate in respect of(a) North Ayrshire Council, (b) Calderdale Metropolitan Borough Council and (c) the Royal Borough of Kingston upon Thames. [76870]

Malcolm Wicks

The Benefit Fraud Inspectorate's (BFI) inspection report on North Ayrshire Council was published on 18 September 2002 and copies of the report were placed in the Library.

The report finds that in the first instance, the council had been delivering an inadequate benefits service. The council needs to take some basic decisions on its operational strategy for delivering benefits, such as the structure, location and management arrangements for benefits administration and counter fraud.

In terms of delivering the service, the report notes that the standards expected for verifying claims to benefit were not being met. Contributory factors included a poorly designed claim form that failed to guide the claimant to complete it accurately, the absence of quality checks to identify weaknesses, insufficient staff training, the lack of a visiting team to undertake targeted checks and a constant backlog of cases. A high percentage of private sector claims were not being referred to the Rent Officer and were thus avoiding the required controls on rent and benefit levels.

The council operates decentralised benefit processing within its housing offices. At the time of the inspection, there were longstanding backlogs of work. The speed of processing was poor but varied across area and benefit type. Claimants were not receiving the same standard of service across the council's area.

The BFI expresses major concerns over the safety and security of the council's IT systems to support the benefits service.

Overpayments have been found to be a particularly weak area of the council's performance. The BFI considers that improvement is needed across all areas, including accuracy, identifying, recording and recovering overpayments. Improvements are also needed on the audit trail for decision making and management information.

The council was not generating the management information needed to manage benefits effectively. For example, in the areas of workflow and capacity, appeals and overpayments.

BFI commends the council for funding Professionalism in Security (PINS) training for its counter fraud staff. At the time of the inspection, fraud investigation was found to be inadequate but the signs were that this would improve. The council needs to develop its Prevention and Detection of Fraud and Corruption policy to include objectives, reporting arrangements, sanctions, review arrangements and how it will evaluate its effectiveness.

The Benefit Fraud Inspectorate's (BFI) follow up inspection report on Calderdale Metropolitan Borough Council was published on 19 September 2002 and copies of the report were placed in the Library.

The BFI first inspected and published a report on Calderdale Metropolitan Borough Council in October 1999. The report made eight major recommendations to improve performance.

This follow up report finds that while progress had been made in implementing these recommendations it had been too little and too slow.

The first inspection made a number of recommendations to improve the council's internal security. Some of these have been implemented but IT access controls remains weak, division of duties is not always appropriate, there is inadequate management checking and insufficient internal audit coverage.

The correct verification of claims was highlighted as an issue at the first inspection and remained inconsistent at the time of the follow up inspection.

Significant improvements were needed to the council's procedures for backdating claims. While some of these had been implemented, the follow up inspection showed there was still a need for improvement, in particular record keeping of applications for backdating. Further improvements were also needed to the council's claim form to ensure that claimants provide sufficient information to allow assessment of the claim.

There had been a noticeable improvement, including the appointment of a new fraud manager, in the council's counter fraud work although much of this improvement took place in the months leading up to the on-site phase of the follow up inspection.

The council dealt speedily with the processing of new and renewal claims, unfortunately, the BFI found that the number of errors entering the system at the time of inputting the information was increasing, with 11 mistakes found in a sample of 40 claims. The problem of a considerable backlog of new and renewal claims had been resolved.

An improved working relationship with the Benefits Agency and the Employment Service (now joined as Jobcentre Plus) is noted in the report.

The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter fraud activities.

The Benefit Fraud Inspectorate's (BFI) inspection report on the Royal Borough of Kingston upon Thames was published on 26 September 2002 and copies of the report were placed in the Library.

The report finds that the Royal Borough of Kingston upon Thames had made many improvements during the 2 years before the BFI inspection and since bringing the benefits service back in house after a period of outsourcing. In some areas this improvement was significant.

These improvements include reductions in the time taken to process new and repeat claims and notifications of changes in circumstances. However, the council needs to improve further in these areas if it is to achieve its Best Value targets.

Other improvements made by the council include the implementation of the BFI national model claim form and Verification Framework, sustained improvements in key customer services and a reduced backlog of work which has led to reductions in customer complaints.

The Royal Borough of Kingston upon Thames still needs to improve its verification of claims, the quality of its fraud investigations and become more effective at recovering overpayments. This is critical if the £30.6m of benefit paid to 6,000 claimants is to be brought under tighter control.

The report finds that the council had a clear prosecution policy to deter fraudsters but identifies weaknesses in the quality of fraud investigations. The report acknowledges the successful prosecution of fraudsters in 2001–02.

Overall the report concludes that the Royal Borough of Kingston upon Thames has established a good platform from which it can make the necessary improvements.

In 2000/01, the Royal Borough of Kingston upon Thames administered approximately £30.6 million in housing benefits.

Kali Mountford

To ask the Secretary of State for Work and Pensions if he will make a statement about the inspection report of the Benefit Fraud Inspectorate in respect of(a) the London Borough of Enfield and (b) Wakefield Metropolitan District Council. [76865]

Malcolm Wicks

The Benefit Fraud Inspectorate's (BFI) inspection report on the London Borough of Enfield was published on 18 September 2002 and copies of the report were placed in the Library.

The BFI reports that the council's management of the administration of Housing Benefit and Council Tax Benefit was poor with weaknesses in many areas.

Access to the benefits system was not sound and the council did not ensure that claims were right from day one. Information was not routinely verified or cross checked and management was not monitoring performance. This significantly increased the risk of fraud and error at the outset of the claim.

The council did not detect when payments went wrong and take prompt action to correct them with appropriate penalties to deter a recurrence. Delays in dealing with changes of circumstances have increased the number and level of preventable overpayments.

Considerable delays occurred in the assessment and payment of benefit. Management was not monitoring the processes to ensure that bottlenecks and backlogs were quickly identified as they appeared. This caused hardships to claimants and by failing to make payments on account in appropriate cases the council increased this.

Insufficient resources were devoted to recovering overpayments of Housing Benefit and Council Tax Benefit. As a result, the council was failing to control the level of outstanding debt.

The BFI also found that the council's counter fraud performance was poor. Weaknesses were identified in the management of the investigation team and the quality of the investigative work.

The council is commended for its commitment to its anti-poverty strategy and for promoting the take up of benefit. Its dedicated team has helped Enfield residents to receive more than £12 million in new and additional welfare benefits since 1996.

The report concludes that the council needs to improve the management and effectiveness of its working practices within the benefit service in order to deliver its corporate vision.

The Benefit Fraud Inspectorate's (BFI) inspection report on Wakefield Metropolitan District Council was published on 9 October 2002 and copies of the report were placed in the Library.

The report finds that in March 2001, the council completed a Best Value Review of the benefits function. The review identified a need to improve in key areas such as claims processing, management checking and overpayment administration. The report finds performance in these key areas is poor. However, BFI recognises the efforts being made by the council to improve performance.

The council's practices for processing benefit claims differed across its 13 sites, and there was a 6 weeks backlog of work creating queries and complaints. The council was intending to centralise its benefit function as an answer to many of its problems, however insufficient plans for centralisation had been produced.

Whilst the report finds examples of good practices, it found differing levels of performance and procedures across the council. The inconsistent verification of benefit claims and low levels of management checks were identified as key weaknesses, increasing the risk of fraud and error entering the benefit system.

The council intends implementing the Verification Framework before March 2003 and it was improving its corporate performance measurement framework. These initiatives combined with centralisation should put the council in a position to provide a much improved benefits service.

The report finds very poor performance in the council's administration of overpayments of benefit, with benefit debt increasing and errors being made. However, the council was enhancing its IT system to improve its performance in overpayment administration.

The council had a sound approach to countering fraud and corruption, and had undertaken some good quality fraud prosecutions.

The report concludes that there is a clear need for the council to improve its benefit performance as the inspection identified many cases of poor performance. However, BFI was encouraged that the council was aware of the challenges it was facing, and with the level of interest shown by elected Members, both in the inspection and the benefit service.

In 1999–2000, Wakefield Metropolitan District Council administered approximately £65.2 million in housing benefits.

Lawrie Quinn

To ask the Secretary of State for Work and Pensions if he will make a statement about the inspection report of the Benefit Fraud Inspectorate in respect of(a) Babergh and (b) Swale district councils. [76866]

Malcolm Wicks

The Benefit Fraud Inspectorate's (BFI) follow up inspection report on Babergh District Council was published on 10 October 2002 and copies of the report were placed in the Library.

The BFI first inspected and published a report on Babergh District Council in April 2000.

This report finds that Babergh District Council had made significant improvements since the first inspection. Despite backlogs of work, the council had made progress in its housing benefits administration and counter fraud work. Throughout the inspection, BFI identified improvements and good practices that had been implemented since the first inspection.

The report finds that the council had introduced initiatives to raise awareness of housing benefits among its residents, and had reviewed its Housing Benefit and Council Tax Benefit claim form.

The council had introduced the Verification Framework, improving the collection and recording of evidence to support new claims for benefit, and it was identifying and checking any inconsistencies to reduce fraud and error. All new claims were subject to a 100 per cent. quality check.

However, the report finds that the council needed to improve its evidence gathering for renewal benefit claims and not make awards before all the necessary evidence was collected.

The report finds backlogs of work, arising from the simultaneous implementation of the Verification Framework and a new IT system for processing housing benefits claims, which were severely affecting the processing times for all claims.

The report finds a marked improvement in counter fraud work, with investigators receiving Professionalism in Security training and a full range of investigations being undertaken. The District Auditor had reported satisfaction with the council's counter fraud measures.

Overpayments had increased since the first inspection, mainly due to the backlogs of work and IT changes. Levels of recovery had dropped and overpayment cases were not well documented or subject to quality checks.

In 2000–01, Babergh District Council administered approximately £12.8 million in housing benefits.

The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter fraud activities.

The Benefit Fraud Inspectorate's (BFI) follow up inspection report on Swale Borough Council was published on 25 September 2002 and copies of the report were placed in the Library.

The BFI first inspected and published a report on Swale Borough Council in April 2000. The report found that while the council demonstrated some good working practices, the efficiency and security of the benefits system was compromised by a backlog of work and a lack of a clear sense of direction and purpose in its counter fraud strategy. At that time, the council had undergone a period of significant change.

This report finds that of the 40 recommendations made in the April 2000 report, the council had implemented 6 in full, partially implemented 24 and not implemented 10.

The report commends Swale Borough Council for its commitment in clearing the backlog of work, which was having a detrimental effect during BFI's first inspection. This required a heavy investment in increasing and training its staffing on the benefit section.

There have also been improvements in the council's benefit claim form, the levels of verification and the speed of processing claims and notifications of change of circumstances.

There were still problems with the council's counter fraud operations. BFI reports that a lack of effective management had hampered the way that the unit operated. The report finds a general lack of management checking and controls to guard the system against fraud, error and abuse.

The report finds significant problems with overpayments not being accurately classified and the situation had worsened since the first report. The council did not always impose the maximum deduction for the recovery of fraudulent overpayments.

The counter fraud operation was not being sufficiently managed and there was minimal management checking and little direction during fraud investigations.

The council's post opening operation was found to be insecure and BFI expresses concern to find that numerous recommendations made in this area in the first report remained unactioned.

In conclusion, the council had only partially delivered the improvements that it said it would in its response to the Secretary of State following the publication of the BFI's first inspection report, published in April 2000.

The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter fraud activities.

Mr. Watts

To ask the Secretary of State for Work and Pensions if he will make a statement about the inspection report of the Benefit Fraud Inspectorate in respect of(a) Erewash Borough Council, (b) East Dumbartonshire Council and (c) St. Helens Metropolitan Borough Council. [76867]

Malcolm Wicks

The Benefit Fraud Inspectorate's (BFI) inspection report on the Erewash Borough Council was published on 26 September 2002 and copies of the report were placed in the Library.

The report finds Erewash Borough Council failing to deliver an adequate and secure benefit service. There were significant weaknesses in the administration of Housing Benefit and Council Tax Benefit and counter fraud work. There were also significant backlogs of work.

At the time of BFI's inspection, the council had been in a state of constant change for over 4 years, and no senior manager was in post with specific responsibility, or expertise in, housing benefits or counter fraud work. This lack of expertise and key personnel had resulted in a complete lack of strategic direction. Council Members were aware of these problems but the council had made slow progress to resolve the issues. The report finds earlier plans had proved to be of limited use and much rested on the appointment of new chief officers.

Despite the serious lack of managerial involvement at a high level, the efforts of benefits staff must not be ignored as they devised procedures, which were a positive measure. They attempted to improve standards by implementing the Verification Framework, expanding customer services and organising occasional landlord forums. Although fragmented, these efforts were a positive step.

There was a serious lack of control of benefits work. There were no quality or management checks, no formal procedures and little training. Staff resources were inadequate.

The introduction of a new IT system was poorly planned and managed, and the system was not used to its full potential. Management information from the housing benefits IT system was unreliable and there were serious flaws in the security of the system.

The report finds errors in all stages of the overpayment process, with little control or monitoring, and no one appointed with specific responsibility for overpayment work.

The council had poor counter fraud performance in all aspects of its operation. Fraud investigations lacked depth and substance and this impaired its ability to prosecute fraudsters.

Erewash Borough Council only fully implemented 9 of 30 recommendations, made by the District Auditor 3 years before the BFI inspection, to improve its counter fraud arrangements.

The Benefit Fraud Inspectorate's (BFI) follow up inspection report on East Dunbartonshire Council was published on 7 October 2002 and copies of the report were placed in the Library.

The BFI first inspected and published a report on East Dunbartonshire Council in March 1999. The report found that the council was a poor-performing authority that needed to design and develop a more secure and accurate benefits administration system and improve the quality of its benefits service.

This report finds that the council had responded positively to the findings in the first report and had introduced some improvements in its administration of housing benefits. However, some key recommendations from the first inspection had not been properly addressed and minimal progress had been made in counter fraud work.

The introduction of the Verification Framework in April 2001 had improved the evidence gathering process. However, the use of the same sub-standard claim form that was in place at the first inspection and poor staff training meant that the majority of Housing Benefit and Council Tax Benefit awards were based on poor or inadequate evidence.

There had been minimal improvement in counter fraud operations, which continued to be poor. Despite the introduction of a prosecution policy, no cases had been prosecuted and no other forms of sanctions had been considered. Weaknesses surrounding the council's post opening and cheque dispatch procedures continued to exist.

However, the report finds that the council had significantly improved in the recovery of benefit overpayments from claimants and landlords who were still receiving benefit. The council was less effective at recovering overpayments from debtors who were no longer receiving benefit.

The report concludes that while some progress has been made across benefits administration, it has in the main been slow. There is much to do to address the weaknesses identified at the follow up inspection and for those that remain outstanding from the first inspection. The council agreed to review the range of corporate duties allocated to the Benefits Manager to enable more management time to be given to improving its benefits service

In 2000–01, East Dunbartonshire Council administered approximately £12.7 million in housing benefits.

The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter fraud activities.

The Benefit Fraud Inspectorate's (BFI) follow up inspection report on St. Helens Metropolitan Borough Council was published on 8 October 2002 and copies of the report were placed in the Library.

The BFI first inspected and published a report on St. Helens Metropolitan Borough Council in April 2000. The report found that the council needed to develop a more secure and accurate benefits administration system and improve the overall quality of its benefits service.

This report finds that the council had responded positively and delivered all 16 major recommendations from the earlier BFI inspection. The report finds that the council had made significant progress and had delivered a major programme of change that had significantly raised the standards of its administration of housing benefits.

Since the first inspection, the council had undertaken a Best Value Review of its benefits service and had introduced the Verification Framework. It had also increased management and staffing levels, reorganised the way it delivers benefits, and enhanced its IT systems.

The council had also introduced a new claim form, and had introduced management quality checking to test the quality and accuracy of benefit awards. The council was also actively reducing the backlogs of work that had been affecting processing times and causing overpayments.

The report finds that the verification process had improved significantly with 66 per cent. of cases examined containing proper evidence. Only 30 per cent. of cases were properly verified at the first inspection. The council plans to provide staff training to raise standards further.

The council had introduced a benefits prosecution policy and had significantly improved its counter fraud operations, with the quality of its fraud investigations improving considerably since the first inspection. However, despite these improvements, outstanding overpaid benefit debt had increased and the council had brought few prosecutions against offenders and had made no use of other sanctions.

The report concludes that there is scope for improvement across the council's benefit service but BFI was encouraged by the progress made since the first inspection.

In 2000–01, St. Helens Metropolitan Borough Council administered approximately £51 million in housing benefits.

The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter fraud activities.