§ 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) inspection report on Knowsley Metropolitan Borough Council was published today 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.
In 2002–03, Knowsley Metropolitan Borough Council administered some £70.8 million in housing benefits, about 19.3 per cent. of its gross revenue expenditure.
BFI inspected Knowsley Metropolitan Borough Council against the performance standards for housing benefits, and concludes that the council's benefits service had not reached standard in any of the seven functional areas—strategic management, customer services, processing of claims, working with landlords, internal security, counter-fraud and overpayments.
The report finds that since 2000 the council had been implementing an ambitious programme of activity that included: implementation of the Verification 52WS Framework; implementing new IT systems; a reorganisation of its Revenues and Benefits division; and the establishment of one stop shops and a customer contact centre. Many of the earlier changes were responsible for a considerable backlog of housing benefit claims, attributed to poor management and pointing to a lack of effective planning and organisation.
The council's benefits service had improved from a "poor" classification in December 2002 to a "fair" classification in December 2003 as part of the comprehensive performance assessment programme. The benefits service had a committed workforce and the report acknowledges the considerable efforts made by Members, senior officers and staff over a sustained period of time.
The report finds that the council had not documented its approach to benefits administration, had not put in place essential strategic policies, and had insufficient procedural staff guidance which resulted in staff making inconsistent decisions when processing claims. The report notes serious concerns about the lack of management assurance and public accountability provided by the benefits service.
The council had received "Beacon Council" recognition for its accessible services, providing public access at several one stop shops and handling all incoming telephone calls at its customer contact centre. It had not however reviewed its service against the requirements of the Disability Discrimination Act 1995 and was also not complying with the Race Relations Amendment Act 1976. Physical access issues for customers with disabilities had been considered but their access to services including information needs had not been assessed neither had the needs of customers whose first language was not English. The council's benefit claim form was clear and simple.
The council had made an impressive effort to clear a backlog of new claims resulting in the council's average number of days to process new claims to housing benefits as being approximately 44 days, compared with the standard of 36 days. However, the council was not consistently applying the standards required for gathering and confirming supporting evidence. Claims processing had taken priority over other work, resulting in a backlog of over 20,000 items of post that was not being managed, contributing to high levels of avoidable overpayments. Sampling showed the average time taken to process changes of circumstances was 58.2 days, compared with the standard of nine days.
The council was making positive efforts to raise the profile of counter-fraud activity but it needs to improve publicity of its prosecution policy both internally and externally to demonstrate that it takes fraud seriously. The report notes extreme concerns that the prosecution process used by Knowsley Metropolitan Borough Council allowed customers to remain under caution for excessive periods of time. Also that the council's prosecution referral process and scoring system that determined appropriate action to be taken and sanction to be applied, undermined the prosecution policy.
The council's benefit overpayment policies and procedures were of a good standard and fraud overpayments were pursued rigorously and promptly recovered. However, sampling showed that 70 per cent. 53WS of benefit overpayments were as a result of the council not promptly processing notified changes of circumstances.
The on-site phase of the inspection took place in October and November 2003, and the report was cleared on 16 April 2004. The 17-week timeline was not met due to key officers in the council not being available for the clearance of the report.
The report makes recommendations to help the council address weaknesses and further to improve the administration of housing benefit and council tax benefit, as well as counter-fraud activities.
My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the BFI's findings and recommendations.