The National Audit Office (NAO) and the Audit Commission (AC) have both published updates to their 1997 reports on Housing Benefit fraud.
The two reports look at the work done by both local councils and central government -through the Department of Social Security and the Benefit Agency.
Both central and local government are commended for the progress that has been made in combating Housing Benefit fraud so far. However both reports state that not enough has been done.
The reports suggest areas of improvement and it is clear that if the Benefit Agency and councils wish make those improvements, then both organisations should look no further than existing government policy. The series of "A New Contract for Welfare" green and white papers layout most of the key objectives in reducing fraud within the benefits systems. The three major themes in the reports are simplifying benefits, especially Housing Benefit, preventing fraud from entering the system in the first place and that the administration of benefits should be standardized and made transparent across services.
To influence the simplification of benefits then councils will have ensure that they lobby the Department through organisations such as the Local Government Association (LGA), the Institute of Rating Revenues and Valuation (IRRV), and The Local Authority Investigation Officer Group (LAIOG). With the launch of three tax credits then the direction of a simple benefits system seems to be already laid out.
The second strand of prevention is established by the introduction of the Verification Framework for local councils and the Evidence Programme for the Benefit Agency. The Department is making an additional £100m available to encourage councils to take on the framework, while Benefit Agency performance targets are being adjusted in order to make certain the Evidence Programme works. Unfortunately the wheels turn slowly in huge bureaucratic organisations such as the DSS and the Benefit Agency and the result is that new targets will not be available to the frontline staff until the summer.
Councils would be well advised to take on the framework before the Benefit Fraud Inspectorate examines their benefits administration. All the Benefit Fraud Inspectorate reports have contained either recommendations to take on the framework or they have commended as good practice those councils that have taken on the framework.
The Benefit Fraud Inspectorate is not the only tool used to encourage both the Local Councils and the Benefit Agency to standardise their administration of benefits. Central Government policy strategy of Best Value in the Provision of Local Services – lead by the Department of Environment Transport and Regions – and the civil services Modern Active Service programme promote a standard of service delivery which strives to be
- Transparent
- One stop
- Right first time
- Value for money
Most councils are embracing best value and benefits services should be fighting for their slice of the pie. Fraud Investigation should be seen as a lead strand of Best Value.
The Audit Commission identifies areas where councils should be looking at making improvements this includes:
- Having a corporate anti-fraud strategy
- Having a prosecution policy
The Commissions report notes that councils are sacrificing accuracy for speed as far as Housing Benefit administration is concerned. This should not be surprising to the commission as local councils operate services based on the demands of the Commissions own "National Performance Indicators for local councils". Councils should be lobbying the Commission to square that circle.
The Commission was concerned at the amount of fraud being committed by senior council officers and council members. In the case of members this fraud is committed mostly by members in receipt of benefits who failed to report their attendance allowance. The defense of most councillors was that they expected the council to notify the benefits section of their allowances. While this excuse is fairly pathetic it would be enough to make it difficult, although not impossible, to prosecute the fraudster. Councils should put into place a mechanism to ensure where councillors are also benefit claimants that information concerning allowances should transferred automatically. Certainly, member fraud is lower in value than officer fraud but the Commission points out that such action "…undermine public confidence in the council's integrity". It certainly is at odds with the Governments policy document on Ethical Local Government.
Officer fraud is still not being dealt with effectively by councils and counts for a larger amount of abuse in financial terms. In fact nearly 650 cases of reported Housing Benefit were undertaken by council officers or members. It is a strong argument for the data matching of payroll records against Housing Benefit records.
The Commission also criticized councils for failing to recover overpaid Housing Benefit. The commission has tried to pick up this problem by introducing new national performance indicators forcing councils to deal with this problem. The recovery of overpayments has always been a difficulty issue for councils. It is a distraction from the important task of delivering benefits and you cannot get blood from a stone. If people are poor, despite the fact that they may have been defrauding the system, then overpayments simply place them into a cycle of debt of which they can not escape. Having said that, the best way in which to resolve the problem of recovering overpayments is to strike as soon as possible. Everyday that an arrangement has not been entered into makes it harder to recover the debt.
Some councils have placed overpayments with a debt collection agency. In the past while this has not been acceptable action for some councillors now that overpayments are the subject of PIs some councillors will probably change their position.
Any council wishing to avoid some of the adverse comments made by the Benefit Fraud Inspectorate in their reports would well advised to study these two reports.
© 1999 Radius
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