Agenda item

(Director of Resources) to consider the attached report.

The Assistant Director Benefits, Janet Twinn introduced the report updating members on the work being undertaken to combat both Housing Benefit and Local Council Tax Support fraud and compliance.

The meeting noted that the Housing Benefit fraud investigation ceased to be the responsibility of the Council from 1 October 2015. The existing Investigation Officers at that time were transferred to the Single Fraud Investigation Service (SFIS), part of the Department for Work and Pensions. The Council however, still remained responsible for the verification and checking of Housing Benefit applications. Local Council Tax Support was the Council’s own scheme and therefore the Council remained responsible for Local Council Tax Support fraud and compliance.

Officers had known for some time that Housing Benefit investigation work was going to be transferred to the Department for Work and Pensions (DWP) from 1 October 2015 and had therefore restructured both the Benefits Service and the Internal Audit service to manage benefit compliance work and Local Council Tax Support fraud and compliance. A compliance team was set up in the Benefits Division to carry out reviews of both Housing Benefit and Local Council Tax Support applications and a Corporate Fraud team was set up as part of the Internal Audit Service.

The DWP advised of the procedure to be followed to refer claims to the Single Fraud Investigation Service (SFIS). Where there was suspicion of Housing Benefit fraud, the Benefits Division made an on-line referral to SFIS and a team within the DWP would assess the referral and decides whether it was worthy of being passed to an investigating officer, who could be based anywhere in the country. If they did not consider that it should be passed to SFIS, they would decide whether the referral should be passed to their own compliance team who would phone the claimant and ask some questions or, they could decide not to pursue the referral at all. If they decided to investigate, the investigating officer would contact the Authority and request that we send them all the documents associated with the claim. Unfortunately, the Authority was not advised which action was to be taken and, of the 37 cases that had been referred to SFIS since October 2015, there has been no further contact from them. The only contact that we have had from SFIS in relation to requests for information and the reassessment of entitlement, were cases where the investigation had been instigated by SFIS. It was known that staff were not happy there and tended to leave.

However, our Compliance Team reviews both Housing Benefit and Local Council Tax Support applications, either by asking for a review form to be completed, or by visiting or telephoning claimants and checking whether any of their circumstances had changed. The team was very proactive in visiting claimants and they would check that a claimant was actually resident, the household composition, and also the relationships between occupants of the property. They also visited every claim where there was a tenant renting a room from a resident landlord as frequently the landlord and tenant were in a relationship or they are close relatives and therefore ineligible for Housing Benefit. Several claims have been withdrawn during visits when it was obvious that the circumstances were not what were originally presented to the Authority. The team worked closely with the Council Tax section and would advise of any cases where they have identified that a council tax discount should be removed. They also work closely with the Benefit Overpayment Officers and have succeeded on several occasions in facilitating a quick repayment of an overpayment where they had identified an unreported change which had resulted in an overpayment.

The Compliance team were also undertaking enquiries into any data-matching mismatches notified to us by the Housing Benefit Matching Service, or any claims referred to us by HMRC where they have identified mismatches  though their Real Time Information (RTI) system which gathers earnings information. Currently, there are mandatory RTI’s which we had to action, but there were also optional RTI’s where there was no obligation on the Authority to investigate. However, the Compliance team was looking at both mandatory and optional RTI’s and recalculating entitlement as necessary. The HMRC intend to expand the RTI system and the Compliance team would then have on-line access to RTI information when required, instead of only being able to obtain information when the HMRC send a mismatch file. When this was available, it would help speed up benefit processing times in general as earnings details would be readily available to Assessment Officers.  

Additionally, the Compliance team also undertook some welfare visits where the claimant required assistance with claiming or to check to see if someone was exempt from the Removal of the Spare Room Subsidy where there was a disabled child or an overnight carer.

It should be noted that we were not allowed to carry out our own prosecutions anymore although we would if we could, for example of persons who claim they have children living with them but do not but use this to claim larger properties.

Councillor Kane asked if this was just the tip of an iceberg and would there be a lot more that we did not know about. Ms Twinn said that SFIS tended to just phone a claimant, ask them standard questions and if satisfied would sign off on that case. This also meant that Local Authority officers did not really trust SFIS to do a thorough job.

Councillor Bedford wondered if we could ask an area manager from SFIS to come and talk to us. Ms Twinn responded that officers were not sure who they were. Councillor Kane said that maybe we should get our local MP involved and establish who they were through them. Ms Twinn said that the Director of Resources would take this back to National Audit as other authorities had the same kinds of problems.

Councillor Lion asked if these problems had been reported to the Finance Portfolio Holder. He was told that the Portfolio Holder had been informed. Councillor Lion asked how much did this cost us. Ms Twinn said that one overpayment was over £90,000; and we did prosecute them.

Councillor Chris Roberts asked what other Councils were doing. Ms Twinn said that they were as helpless as we were. But we do our own compliance and visits and so were ahead of the game on this.

Councillor Whitehouse said that this was a very useful report, he was pleased to see in paragraph 7 that we also assisted claimants who needed it and did not overlook people in need. Ms Twinn noted that we were building up on our welfare side.

It was noted that when we went after an overpayment, say of £100; the government gave us £40, and if we recovered the £100 we would keep that and the £40.

Speaking on staff turnover in the SFIS it was noted that a lot of the contacts made there tended to disappear within months. It was unknown if they resigned or had been moved on to a different office or another part of the country. Councillor Bedford asked if we could put in a Freedom of Information request to SFIS asking for their management structure. Councillor Lion said it would not hurt to go to our MPs as well. Councillor Kane added that this was a major issue that covered other authorities.

Ms Twinn noted that all authorities in Essex were working on Data Matching, that is putting their data into one big ‘pot’ to find any discrepancies that crossed borders, matching data that had not been matched before. This was only possible now that they have got over the legal hurdles and the data matching problems. They have a company working on this to pull it all together, putting the data into secure servers. It was hoped to increase the Council Tax base and to extend beyond this into other areas, increasing our income in other sections. This data base would be going live soon. The Chairman asked if we could have some feedback on this project in the new year.

RESOLVED:

(1)  That the Committee noted the report on Benefits Fraud and compliance;

(2)  That an updating report on Data Matching be brought to a future meeting.