Written Statement of 11 May 2004

WORK AND PENSIONS

  Barking and Dagenham Council(Benefit Fraud Inspectorate)
  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 London Borough of Barking and Dagenham 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 expect local authorities to aspire to and achieve in time.

  In 2002–03, London Borough of Barking and Dagenham Council administered some £65.4 million in housing benefits, about 16 per cent of its gross revenue expenditure.

  BFI inspected London Borough of Barking and Dagenham 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 the council's benefits service, part of the revenues services, was embarking on a major programme of change that included improving its performance management, planning the replacement of its benefits IT system, planning the procurement of an electronic document management system, and reviewing its staffing structure.

  There was no structured approach to staff training and development of staff, and there were no documented procedures to support staff and ensure consistency of approach. Managers had limited access to performance reports and did not make routine use of those that were available. The IT systems were inadequate and required high levels of manual intervention, hindering rather than supporting the benefits service.

  The report finds that the average time taken to process new benefit claims was 43 days, compared to the performance standard of 36 days and 90 per cent. of new claims were processed within 14 days of receiving all
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  information. However, there were delays in dealing with changes of circumstances and appeals and there was no management checking of work.

  The council's telephone service was poor with 54 per cent. of calls not being answered. Customers were often required to attend the offices on more than one occasion because they had not been asked to provide all the necessary information at the first point of contact. There were weaknesses in the management of documents with staff being unable to locate paperwork, resulting in further unnecessary contact with customers. The council's benefit claim forms and decision letters needed to improve to give clearer guidance and information to customers.

  The report also finds that all areas of the council's counter-fraud activity were weak. The council had no management information concerning fraud referrals, and very limited investigation activity had been carried out. New investigation staff had been appointed in 2003 but there were inadequate systems in place to allow them to progress investigations promptly.

  The council was unable to provide verifiable performance information relating to overpayments of benefit, and no single officer had overall control of overpayment recovery. Also the council did not use the full range of recovery methods available.

  The report makes recommendations to help the council address weaknesses and to further 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.

  Vulnerable Customers (Payments by Cheque)
  The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)
  Direct Payment is a modern, reliable, secure and efficient method of payment which is proving popular with those pensioners and benefit recipients who are using it. More customers now have their pensions and benefits paid into an account than by order book. We will be writing to the remainder before the end of the year inviting them to convert to direct payment.

  Eighty seven per cent. of DWP customers already have access to an account suitable for direct payment (the figure rises to 91 per cent. for pensioners). The wide availability of new, easy to operate accounts (including basic bank accounts and the Post Office card account) means that there should only be a very small number of people that cannot genuinely open an account— including, for example, some homeless people and some people with an illness or disability. There will also be some people who cannot manage an account—some will never be able to manage one (again due to illness or disability), while others may be in this position for only a short period (perhaps due to the absence of a regular carer or a short period of mental illness).
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  Several meetings have been held with customer representative groups (including CAB, Help the Aged, Age Concern, MIND etc) to ensure there was a shared understanding of the needs of the customers who cannot be paid directly into an account. These meetings helped us develop a detailed list of requirements and played a key role in shaping the detailed design of the exceptions arrangements.

  In assessing options for the ongoing method of payment for customers who are unable to open or manage an account a number of criteria were taken into account including; the ability to meet the needs of customers, timescales for delivery, reliability and cost. To meet customer needs and maintain a robust delivery service we have decided to continue with the existing system of cheques, with improvements to the security of the service.

  Customers who will require a cheque payment are likely to include those who are least able to cope with change, but will already have had experience of, and be familiar with, cashing paper instruments of payment at the Post Office. The cheque solution replicates this process and will best suit these customers.

  Cheques can be issued on a weekly basis to the customer's home address (less frequently for some people) and are cashable at Post Office branches (as well as payable into bank accounts). Very importantly, they offer the flexibility needed for those customers who have a series of different people collecting their money for them and will be a solution for those people who are unable to operate PIN-based or cheque based accounts.

  Safeguards will be in place to ensure people get their money in the event that the cheque does not arrive on time.

  Paying by cheque is a well-established method of payment. We will closely monitor the operation of cheque payments to ensure that they meet the needs of some of our most vulnerable customers. If this identifies significant problems with these arrangements then we will make the necessary improvements.

  As we have made clear cheque payments are designed for those vulnerable people whose benefits or pensions we cannot pay into any type of account. In order that we can provide the necessary level of support to this group we will, in parallel, introduce measures to ensure the maximum number of people who can use an account understand the comparative benefits of direct payment.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Landfill Allowance Trading Scheme
  The Minister for the Environment (Mr. Elliot Morley)
  My Department today published the outcome of the Landfill Allowance Trading Scheme Consultation, which contains final details on the operation of the scheme. This is available on the DEFRA website www.Defra.gov.uk.

  The aim of the scheme is to enable England to meet the targets set by the landfill directive for reducing the amount of biodegradable municipal waste sent to landfill in the most cost effective way. It will be launched on 1 April 2005.
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  The Landfill Allowance Trading Scheme is thought to be the first trading scheme in the world involving waste. The Government will allocate a decreasing number of allowances for each waste disposal authority in England for each year between 2005 and 2020. Authorities can then choose to trade these with other authorities, to borrow up to 5 per cent. of allowances from their next year's allocation or to bank unused allowances for use in future years. The scheme is designed to give waste disposal authorities as much flexibility as possible, whilst ensuring that the landfill directive targets are met. This is an innovative scheme that forms part of a comprehensive commitment to reduce waste in England.

DEFENCE

  AFPRB 2004 Pay Award
  The Secretary of State for Defence (Mr. Geoffrey Hoon)
  The supplement to the 2004 report of the Armed Forces' Pay Review Body making recommendations on the pay of service medical and dental officers has been published today. Copies of the supplement are available in the Vote Office and the Library of the House.

  The Review Body recommends an increase of 3.225 per cent. for all regular and reserve defence medical services medical and dental officers. The Review Body also recommends a pay increase of 3.225 per cent. for medical and dental cadets and an out-of-hours supplementary payment of £4,500 to junior doctors. In addition, the Review Body recommends that there should be an increase of 3.225 per cent. in the values of trainer pay and distinction awards.

  The cost of these recommendations to the defence budget will be some £6.3 million. This will be met within existing Departmental expenditure limits.

  The Review Body's final recommendations are to be accepted in full, with implementation effective from 1 April 2004.

TREASURY

  Aggregates Levy Relief Scheme
  The Economic Secretary to the Treasury (John Healey)
  The Government are extending the aggregates levy relief scheme in Northern Ireland. The relief, which will continue to cover aggregate in processed products, will be extended to cover virgin aggregate exploited in Northern Ireland. Instead of the relief reducing annually until it ended in April 2007, the level of relief will now be fixed at 80 per cent. of the full rate from 1 April 2004 and it will apply until 31 March 2011. The introduction of the new scheme follows notification from the European Commission on 7 May that the Government's proposals for extended relief have received state aid clearance.

  Quarry operators in Northern Ireland will be able to claim the extended relief straight away, providing they enter into agreements, that will commit them to making significant environmental improvements to the way their operations are run. Initially operators will need to satisfy the Department of the Environment in Northern Ireland (DoENI) that they hold or have applied for

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  relevant regulatory authorisations, and enter into an agreement with DoENI, which will commit businesses to arrange a site audit, agree site-specific targets and comply with the code of practice for the aggregates
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  industry in Northern Ireland. Continued eligibility for relief will depend on businesses meeting their agreed environmental targets, which will be regularly monitored and reviewed.

  Northern Ireland: Aggregates Levy Relief Scheme
  The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)
  My honourable friend the Economic Secretary to the Treasury (John Healey) has made the following Written Ministerial Statement.

  The Government are extending the aggregates levy relief scheme in Northern Ireland. The relief, which will continue to cover aggregate in processed products, will be extended to cover virgin aggregate exploited in Northern Ireland. Instead of the relief reducing annually until it ended in April 2007, the level of relief will now be fixed at 80 per cent of the full rate from 1 April 2004 and it will apply until 31 March 2011. The introduction of the new scheme follows notification from the European Commission on 7 May that the Government's proposals for extended relief have received state aid clearance.

  Quarry operators in Northern Ireland will be able to claim the extended relief straight away, provided that they enter into agreements that will commit them to making significant environmental improvements to the way their operations are run. Initially operators will need to satisfy the Department of the Environment in Northern Ireland (DoENI) that they hold or have applied for relevant regulatory authorisations, and enter into an agreement with DoENI, which will commit businesses to arrange a site audit, agree site-specific targets and comply with the code of practice for the aggregates industry in Northern Ireland. Continued eligibility for relief will depend on businesses meeting their agreed environmental targets, which will be regularly monitored and reviewed.

  Public Audit (Wales) Bill
  Lord Evans of Temple Guiting
  The regulatory impact assessment (RIA) that accompanied the WS 6
  Public Audit (Wales) Bill upon its introduction to the House of Lords on 27 November 2003 included an estimate of £500,000 for the set-up costs of the Wales Audit Office (WAO). The WAO is the new body that would comprise the Auditor General and his staff under the arrangements provided for in the Bill.

  The estimate dated back to April 2003 when the Bill was first published in draft form for public consultation and pre-legislative scrutiny. It was acknowledged in the RIA and during pre-legislative scrutiny of the draft Bill in the summer of 2003 that it was very hard to provide a more definitive estimate at such an early stage. The figure of £500,000 remained the best estimate available at the time of the Bill's introduction.

  On 6 May the National Assembly Audit Committee gave consideration to and accepted a paper prepared by the Auditor General that identified set-up costs of £987,000. The costing, which is the product of a detailed costing analysis undertaken jointly by the National Audit Office and the Audit Commission in Wales over recent months, is also subject to consideration by the National Assembly for Wales Minister for Finance, Local Government and Public Services.

  The £987,000 figure includes £147,000 for value-added tax and £120,000 for the cost of a specialist project manager to oversee the set-up arrangements. These items were not included in the early estimate of £500,000 and account for over half the difference in cost. The figure also includes information and communications technology costs of £350,000.

  The other categories of cost comprised in the overall figure relate to:

  the acquisition and implementation of finance and human resource systems at £ 180,000;

  the establishment of Internet and intranet facilities and related communication costs such as stationery and signage at £80,000;

  the development costs of audit support software and a unified audit manual at £55,000;

  minor accommodation alterations; related specialist support services such as facilities management and legal costs at £55,000.

  The Bill RIA will be amended to take account of the change in costing.