§ 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 Liverpool city 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 178WS 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, Liverpool city council administered some £237.1 million in housing benefits, 21.69 per cent. of its gross revenue expenditure.
BFI inspected Liverpool city council in July 2000 and identified significant weaknesses in its provision and management of benefit and counter fraud services.
The second inspection report finds that since July 2000 the council had initiated a major business transformation programme to address the issues and recommendations in BFI's first report. These included the:
re-engineering of its business processes;establishment of a joint venture with a major private contractor to provide essential business services to improve its benefits and counter fraud services, including a customer contact centre and one stop shops;implementation of a document management system in January 2003;full implementation of the verification framework in April 2003;replacement of its benefits and council tax IT systems in October 2003.The report finds that the council had a clear vision for its benefits service supported by policies covering the full range of benefit administration activities. However, IT problems led to a backlog of work and the council had consistently failed to meet best value performance indicators for speed of processing claims. Delays in processing claims were undermining most aspects of the benefits service. New claim customers had to wait an average of 143 days for a claim to be processed and delays in processing reported changes of circumstances had resulted in overpayments being incurred unnecessarily by the council, representing a loss of public funds.
BFI had serious concerns about the total level of overpayment debt at the council, and an estimated £3.5 million of outstanding debt had not been transferred from its old benefits IT system.
BFI commend internal audit for its support of the benefits management team in addressing areas of weakness identified.
The counter fraud service was very effective and made use of the full range of sanctions 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.