Part Five – Life On The Front Line: Example

WBS & Subsidy Order & Circular F17/99

Anytown District Council (ADC)(1) has made good use of the Weekly Benefit Savings Scheme (WBS)(2) over the last few years, working within what had been considered as good practice. However, as can be seen the figures have dropped over the year. The reason for this will not be different than any other council. The changes in the rules and the level of investigative work required by the scheme are having its impacts.

The Number of investigators and administration staff has risen to deal with the work but the amount of WBS being scored is dropping. While it is more difficult to prove WBS, the amount of investigation has not dropped. The District Audit Data Matching exercise (National Anti-Fraud Initiative – NFI) has continued and from 1998/99 been a legal requirement. The Department themselves are keen to promote the Housing Benefit Matching Service (HBMS), while the Benefit Fraud Inspectorate have recommended more use of the fraud hotline and referrals from staff.

As stated in the previous paragraph the council was inspected by the Benefit Fraud Inspectorate who’s main criticism of the council’s investigative process by the was that while the claims of WBS by ADC were acceptable there were a number of cases where additional work was required where WBS had not been claimed in order to be able to claim. ADC has responded to that challenge but the downside is that the introduction of more professional investigative techniques and the use of the s110 powers(3) is that cases take longer to investigate and generate more paperwork in the form of evidence.

The costs of the team has remain consistent over the last two years. The operational budget for 98/99 was £182,560 in 99/00 it dropped to £ 161,560, but to perform at the level that Government expects will result in a higher costs. The cost of each investigation in 98/99 was £32.79 in 99/00 it dropped to £25.16. However, with more prosecution the cost will definitely rise.

The Benefit Fraud Inspectorate

The visit by the Benefit Fraud Inspectorate had its own impacts on the service, not just in the recommendations that the Benefit Fraud Inspectorate made but also in the disruption to the service. The Benefit Fraud Inspectorate spent five to six weeks with five to six inspectors on site. Office space had to found, files given and the work load within the section suffered.

None of the recommendations in terms of fraud investigation made by the Benefit Fraud Inspectorate fell outside of the Government policies and agenda. They recommend higher level investigation in order to maximise WBS and more prosecutions and joint working with other agencies.

Changing Culture

As a result of the changes in government policy and the recommendations of the Benefit Fraud Inspectorate the investigations team is moving towards a different approach to investigating alleged fraud. Some of the measures already implemented by ADC are:

• The appointment of inspectors

• This includes the proper use of inspectors powers

• Interviewing under PACE codes of conduct

• New methods of recording and monitoring referrals and investigations

• Joint projects with the Benefits Agency, Trading Standards and other organisations
  
• New arrangements for the prosecution of offenders

• This includes complying with the following legislation
  
• Police and Criminal Evidence Act 84
• Criminal Justice Acts 88 93 & 98
• Theft Acts 68 & 74
• Data Protection Act 84 & 98
• Public Disclosure Act 99
• Criminal Procedures Act 96
• Criminal Evidence Act 84
• Civil Evidence Act
• Prosecution of Offenders Act 85
• Criminal Courts Act 73
• Proceeds of Crime Act 95
• Common Law of Confidentiality
• Social Security Administration Act 1992
• Social Security Administration (fraud) Act 1997
• Various Housing Benefit & Council Tax Benefit regulations

• The use of notebooks
• The use of investigation files
• Tape librarian for PACE Tapes
• Evidence control

The changes

Already we have seen more project based projects and joint working are taking us away from the bread and butter work of obtaining WBS. But given the difficulties in reaching the standard of investigative work required, the new work is producing WBS that is sustainable.

ADC is expecting more investigations resulting in offences under section 112(1) a of the Social Security Administration Act 1992 as amended by the Social Security Administration (Fraud) Act 1997. However, most of these will attract a penalty rather than a caution. However ADC expects a high level of default on these penalties as it is expected that claimants are likely to go into hardship. This is of course in direct conflict with ADC’s own Anti-Poverty Policy and the governments policy on social exclusion. However, it would be wise to take a report to ADC members to get their instruction, given that the Benefit Fraud Inspectorate recommendation is that more prosecutions and penalities should be applied. It is to be remembered that the Benefit Fraud Inspectorate report comes from the secretary of state, who could decide if improvements are not made to put the service out to contract or impose further subsidy penalties.

ADC members should be advised that expenditure on the service will increase in the next year, especially if we are to become Verification Framework complaint. However, additional income will come from the new WBS Prosecution subsidy, Joint Working incentive funding and the higher lever subsidy of 30%.

ADC embers should also be advised that based on the experience of other councils, that VF is likely to place the benefit service into backlog. A backlog spiral is very difficult to break. This will not only effect the resulting work from investigations, but also effect performance indicators. However, the Benefit Fraud Inspectorate has recommended strongly that VF should be implemented.

The government appears to setting LA into a position that means that failure is inevitable. ADC may want to consider putting the service out to tender, although Benefit Fraud Inspectorate reports on contracted out services have not shown that this is a necessarily a better option.

2. The WBS element was calculated as the reduced weekly benefit multiplied by 32 (the number of weeks that a claim could stay in payment without being detected). Therefore a weekly Housing Benefit of £50pw would result in WBS of £1600. The subsidy element of this would 25% of the WBS ie £400. If the claim had been running 10 weeks then the overpayment element would be £500 of the council could claim 90% subsidy and recover the amount (ie £950) Total worth to the council if above threshold £1350 less the original payment £500 = £850 profit.

3.  Social Security Administration Act 1992

see WBS part 6