Dumfries & Galloway Council Audit of housing and council tax benefit Risk assessment report Prepared for Dumfries & Galloway Council May 2013
Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. It provides services to the Auditor General for Scotland and the Accounts Commission. Together they ensure that the Scottish Government and public sector bodies in Scotland are held to account for the proper, efficient and effective use of public funds.
Contents Introduction... 4 Executive summary... 4 Welfare Reform... 5 Business planning... 6 Performance reporting... 7 Meeting the needs of the user and the community... 8 Delivering outcomes... 9 Speed of processing... 9 Accuracy... 11 Interventions... 12 Overpayments... 13 Appeals and Reconsiderations... 14 Counter-fraud... 14 Appendix A... 16 Dumfries & Galloway Council Page 3
Introduction Introduction 1. This risk assessment was completed as part of Audit Scotland s housing benefit (HB) risk assessment programme. It does not represent a full audit of Dumfries & Galloway Council s benefits service. 2. The Local Government in Scotland Act 2003 introduced new statutory duties relating to Best Value and Community Planning. The key objective of the risk assessment is to determine the extent to which the benefits service is meeting its obligations to achieve continuous improvement in all its activities. 3. Specifically, the risk assessment considers the effectiveness of the benefits service in meeting the needs of the community and its customers, and delivering outcomes. 4. Information for this risk assessment was gathered from a range of sources including: the self-assessment, supporting evidence, and updated action plan provided by the council Department for Work and Pensions (DWP) indicators and other performance measures scrutiny of internal and external audit reports discussions with senior officers in the council during our site visit in March 2013. Executive summary 5. Dumfries & Galloway Council's benefits service has delivered continuous improvement across all areas of the service since Audit Scotland's previous risk assessment report in September 2008. 6. Importantly the service has effective management information systems in place and regularly reviews its working practices to help ensure the effective and efficient service it delivers to its customers continues at the same high standard despite an increased demand. 7. Benefits managers and staff across all four processing sites are aware of their respective responsibilities and fully understand how their individual performance impacts the overall service performance and delivery. The in-house Performance Management (PM) framework collates processing times, volumes and accuracy performance at service, team and individual level and reports are produced and discussed monthly. 8. The introduction of DWP's Automated Transfers to Local Authority Systems (ATLAS) notifications has resulted in a significant increase in the number of notified changes the service receives. While this has had an adverse impact on speed of processing performance across Great Britain, the service took prompt action to limit this by contracting a private provider to clear the peak of work. Working with this provider, the service has been able to increase the automation of the ATLAS notifications it now receives. Page 4 Dumfries & Galloway Council
Welfare Reform 9. The service consistently delivers a strong speed of processing performance and its annual performance for both 2010/11 and 2011/12 placed it in the top three Scottish councils for processing new claims and changes of circumstances. 10. In recognition of the effective management arrangements in place for performance management and the strong performance it delivered in speed of processing and fraud, the service was awarded the Institute of Revenues Rating and Valuation (IRRV) Scottish Benefit Team of 2011. 11. Audit Scotland identified seven risks to continuous improvement when it carried out the previous risk assessment in September 2008. The council submitted an action plan to address these risks by June 2009. Audit Scotland considers that six risks have been addressed and that more work is needed in the area of business planning. Appendix A covers this in detail. Welfare Reform 12. In November 2010 the UK Government published a White Paper Universal Credit: welfare that works which set out proposals for reforming the welfare system for people of working age. The Welfare Reform Act received Royal Assent on 8 March 2012 and aims to simplify the benefits system. A range of working-age benefits, including housing benefit, will be brought together into a single streamlined payment of universal credit (UC) administered by DWP. The first applications for UC are due to be made in October 2013. 13. This is the biggest change to the welfare system for over 60 years and will have a significant impact on local authorities and the services they provide. Effective planning is essential to meet the challenge of this large scale change. 14. The council established a cross-departmental Welfare Reform Member Officer Working Group, led by Head of Customer Service, in August 2012. Its latest output was a report to the Policy and Resources Committee in February this year which detailed the welfare reform changes from April 2013, the impact these would have on local households, and the mitigating actions the council was developing or had in place. 15. At the February 2013 committee meeting it was decided to revise the make up of this group and change to a new officer only group led by a member of the Corporate Management Team (CMT) and including key stakeholders. In addition, an Ad Hoc Welfare Reform Sub Committee was established to make recommendations on strategic and policy issues arising from welfare reform. 16. The 21 actions taken forward from that meeting are included in an action plan and progress on these was reported to committee and CMT on 30 April 2013 and will be regularly reported thereafter. Dumfries & Galloway Council Page 5
Business planning 17. At the time of our visit in March, the council's communications unit was in the final stages of developing and securing agreement to a communications plan as well as welfare reform booklets and a members briefing pack. 18. The service has done much to prepare for the welfare reform challenges. Activities include: taking forward a number of projects implementing changes to the benefits caseload communicating the changes through staff briefings and training, collaborative working with Registered Social Landlords (RSL) and on its website pages participating in regular meetings to discuss welfare reform with relevant stakeholders including, RSLs, Citizens Advice, DWP, NHS and the third sector. 19. To better co-ordinate these projects and liaison with its stakeholders, the service appointed a welfare reform co-ordinator in March 2013. The co-ordinator's responsibilities include liaising with DWP as the council is involved in one of the UK wide Local Authority (LA) Led pilots. Specifically the service is supporting digital inclusion as well as working with the council's employability and skills service to provide financial education and support. Business planning 20. An effective business plan provides an opportunity for the council to set out the aims and objectives for each service and should contain key deliverables against which performance can be measured, monitored and reported. 21. The service sits within Community and Customer Services (CCS). The CCS Business Plan 2012 to 2015 details: its contribution to corporate priorities service aims and objectives where the service is now, where it wants to be and includes an action plan setting out what it will do to get there key performance indicators. 22. While the benefits service has a strong reputation for delivering improvement, mainly because of the well-established management team it has in place, currently there is no benefits service business plan. However, a business plan is being developed for 2013/14 to detail what it will do to meet the challenges it faces and at the same time maintain its current strong performance. 23. In addition, the council decided to create the post of Service Manager Revenues and Benefits in recognition of the important part that the service plays in the welfare reform agenda and to allow the service to be directly represented at cross departmental meetings. The post was filled in in February 2013. Page 6 Dumfries & Galloway Council
Performance reporting 24. Audit Scotland identified risks to continuous improvement during the previous risk assessment. We found that the annual business plans did not detail the performance targets to be achieved and the key activities the service would carry out to achieve them. This risk remains. Risk to continuous improvement 1 The only performance indicator in the CCS Business Plan to evaluate the benefits service's performance relates to the annual gross administration cost per case. At a minimum the speed of processing, a national indicator should be included to evaluate effective service delivery. Performance reporting 25. The regular reporting of performance to senior management and members is an essential component of service delivery and provides senior managers and members an opportunity to: challenge an under-performing service recognise and give credit to the service when performance meets or exceeds expectations gain assurance that a service is operating effectively, efficiently and economically. 26. Targets are set for all areas of benefit service delivery and are collated and evaluated at individual, team and service level. Monitoring reports are produced monthly and are discussed at management and team meetings. 27. The service introduced its performance management framework across all four processing sites between January 2011 and March 2012. This was to help ensure consistency when the service is facing increased demand with the same number of staff. Individual performance is evaluated taking into account speed, accuracy and volume. One to one meetings take place monthly between processing staff and supervisors where the focus is on achieving continuous improvement. 28. Audit Scotland identified risks to continuous improvement during the previous risk assessment. There was no systematic reporting on benefits administration and counter-fraud performance to senior officers within Financial Services where the service was previously located. This has been addressed as key performance information which includes speed, caseload and complaints, is reported to senior management each month. In addition monthly qualitative reports to senior management highlight areas of strength or weakness. Risk to continuous improvement Dumfries & Galloway Council Page 7
Meeting the needs of the user and the community Risk to continuous improvement 2 The service continues to report its speed of processing performance to senior management using the DWP's Right Time Indicator (RTI). From April 2011, DWP's focus has been on new claims and changes processing times separately as it had concluded that combining the two into the RTI did not provide a clear picture of local performance. Meeting the needs of the user and the community 29. Encouraging benefit take-up, providing customers with easy access to skilled and knowledgeable staff, taking account of the needs of the local community, and managing customers expectations when things go wrong are essential components of an effective and efficient benefits service. 30. The council and the service has much in place to measure and evaluate the quality and time taken to respond to customer enquiries made by telephone, face-to-face, in writing and by e- mail. These include: 15 Customer Service Centres (CSC) throughout the area where face to face enquiries are dealt with moving benefits phone calls to the corporate call centre from July 2012 which has the technology to measure the number of calls waiting and the abandonment rate. Figures show that capacity needs to be increased to reduce call handling times and discussions are on-going to increase resources all written correspondence being recorded on the service's document management system which allows staff to track response times and identify any overdue responses. 31. The service is in the early stage of developing access through the internet by making electronic forms available and encouraging claimants to make enquiries by this route. 32. To facilitate improved customer service, there is routine liaison and collaborative working with DWP, RSLs and council colleagues in the homeless service, CSC and the corporate call centre. In addition, the service is developing further partnerships with the third sector to help support the council's new financial inclusion strategy and help customers face the challenges welfare reform may bring. 33. Audit Scotland identified risks to continuous improvement during the previous risk assessment. We found that the council had not consulted with its benefits service customers, the wider community and its private landlords on the level and type of benefits service they need. This risk has been addressed. The results of the latest customer surveys are generally positive and in addition the number of complaints has steadily decreased year on year. Page 8 Dumfries & Galloway Council
Delivering outcomes Delivering outcomes 34. Effective operational processes and IT systems, along with skilled staff help benefit services deliver sound performance and continuous improvement. The council has a number of management arrangements in place to support this. 35. Benefits managers and staff across all four processing sites are aware of their respective responsibilities and fully understand how their individual performance impacts the overall service performance and delivery. 36. To meet the demands of increased processing work with the same number of staff the service introduced its in-house PM framework. Processing times, volumes and accuracy performance are all collated at service, team and individual level and reports are produced and discussed monthly. Where required, staff are fully supported to help improve their performance. Historical information demonstrates improvement, while continued communication, training and on-going support helps ensure continued improvement or at the very least that strong performance is maintained. 37. As is the case for most, if not all, benefits services, the introduction of DWP's ATLAS notifications has resulted in a significant increase in the number of changes the service received. Instead of the automatic loading of information which had been initially expected it was found that user intervention was required. 38. While this has had an adverse impact on speed of processing performance across Great Britain, the service managed to limit the impact by promptly contracting a private provider to clear the peak of work. Through collaborative working with this provider and after thorough testing, the service has been able to increase the automatic loading of the ATLAS notification it now receives. 39. In recognition of the effective management arrangements in place for performance management and the strong performance it delivered in speed of processing and fraud the service was awarded the IRRV Scottish Benefit Team of 2011. Speed of processing 40. When customers claim benefits, it is a time of financial uncertainty for them and, as such, it is essential that the service has sufficient fully trained and effective benefit processors in place who can make informed decisions on complex benefit claims and pay benefits promptly. 41. Exhibit 1 illustrates the council s current and historic performance Dumfries & Galloway Council Page 9
Average number of days Delivering outcomes 30 Exhibit 1 - Speed of processing performance 25 20 15 10 New claims - Dumfries & Galloway New claims - GB average Changes - Dumfries & Galloway Changes - GB average 5 0 2009/10 2010/11 2011/12 2012/13 Q2 2012/13 (YTD Jan) Source: Dumfries & Galloway and DWP 42. This shows improved performance since 2009/10 and illustrates that the council has processed new claims and changes of circumstances significantly quicker than the national averages. 43. The service has a number of effective working practices that has resulted in this improved performance. These include: introducing assisted interviews to ensure customers fully understand what further information is needed to support their claim at the earliest possible stage developing and delivering training to ensure all council and RSL staff who serve as a point of contact with benefit customers know what information to ask for when a claim or a change notification is received and how to verify evidence as acceptable and correct reviewing all new claims and changes where there are any delays with a view to improving working practices and identifying any specific training requirements developing and introducing online forms that automatically populate the benefits IT system introducing the in-house PM framework referred to earlier that has helped improve individual performance. 44. These activities have placed the service in a very strong position when compared to other services in Scotland. In 2010/11 and 2011/12, the service was in the top three Scottish councils for the speed of processing new claims and changes of circumstances. Page 10 Dumfries & Galloway Council
Delivering outcomes Accuracy 45. The accurate and secure administration of benefit should be a key priority for every council, and to support this it should have a robust quality assurance framework in place. 46. The service's approach to quality checking is set out in its quality assurance protocols and guidance notes. It has invested in an electronic performance management and quality assurance module that allows it to select cases for pre-payment checking directly from the benefits IT system. The module automatically selects cases to be checked on a daily basis and identifies key areas and risks that require focus. Quality checks are carried out by staff in the central performance and assurance team and supervisors in the four processing sites. 47. In addition the service also aims to check 4% of its notification letters and their associated claims each day. During this current year it has checked 5% of all notifications issued up to January 2013. 48. Targets are set for correct entitlement and correct payment. A case is considered to have an entitlement error where the error identified affects entitlement, but because the case is checked pre-payment, an incorrect payment has not yet been made. Similarly a case is considered to have a payment error where the error found affected entitlement and the incorrect payment has already been made. Exhibit 2 illustrates the council s current and historic performance. Exhibit 2: Accuracy performance Year Correct Entitlement Target - 97% Correct Payment Target - 99% 2010/11 95.8% 99.3% 2011/12 96.9% 99.8% 2012/13 (YTD Jan) 95.9% 99.8% Source: Dumfries & Galloway Council 49. The results of the quality checks are collated at service, team and individual level and the results are discussed monthly and fed into the in-house PM framework. Staff also receive individual feedback during the monthly one-to-one development meetings with their line manager. 50. The performance and assurance team is responsible for ensuring quality and accuracy in all areas of work. The in-house PM framework and processes identify any training requirements and the team take action to meet these. 51. For staff failing to meet accuracy targets, a performance improvement plan is developed and led by the management team to ensure the appropriate level of help and support is available. Dumfries & Galloway Council Page 11
Delivering outcomes 52. Each month, time is set aside to provide updates and training to all processing staff. Details of the issues covered are made available to all staff for future reference with a designated email address for any questions relating to the content. 53. The service's quality assurance protocols and guidance notes set out the quality assurance aims. These are to ensure: standard practice is adhered too the quality of all work is to a high standard the quality of outgoing correspondence is to a high standard benefit administration stands up to internal and external scrutiny. 54. Reported accuracy performance, a continued reduction in LA error overpayments and the lack of any significant findings by internal and external audit provide assurance that these aims are being met. Interventions 55. To minimise error in the caseload, councils must encourage customers to report changes of circumstances on time and have a robust intervention programme to identify changes and take appropriate corrective action. Exhibit 3 illustrates the council s current and historic performance. Exhibit 3: Pro-active intervention results Year Completed Changes identified % 2009/10 4,543 2,466 54.3% 2010/11 5,579 2,730 48.9% 2011/12 5,818 2,690 46.2% 2012/13 (YTD Jan) 2,681 1,747 65.2% Source: Dumfries & Galloway Council 56. The service has two approaches to help ensure caseload accuracy. The first is to educate customers to promptly report any changes in their circumstances by making information available in areas that customers are likely to visit such as Post Offices, hospital waiting rooms and CSC. 57. The second is the rolling programme of targeted interventions on areas of risk. To support this, an annual plan is developed based on national and local risk. Intervention activity is carried out by postal, phone or desk-based checks and, only where necessary, by visit. 58. With the introduction of ATLAS, the service has reduced its intervention activity. This decision was made initially because of the increased volume of work produced by ATLAS and the Page 12 Dumfries & Galloway Council
Delivering outcomes associated resource requirements. However, now that it has bedded in, there is recognition that ATLAS automatically notifies the council of more changes than before. 59. As a result, the rolling programme has been reduced to target only high risk cases which include elements that are not notified through ATLAS such as earned income. Exhibit 3 confirms that this reduced, but better targeted intervention activity has resulted in a higher percentage of changes being identified for the current year. 60. Audit Scotland identified risks to continuous improvement during the previous risk assessment. We found that the council did not have effective processes in place to routinely gather and analyse information on the effectiveness of its risk criteria to ensure its interventions activity was targeted effectively. This has been addressed as intervention activity and outcomes are collated and analysed to ensure resources are effectively targeted. Overpayments 61. To protect public funds, councils should take appropriate steps to ensure that overpayments are minimised and that when they do occur they are correctly classified and rigorously recovered. Exhibit 4 illustrates the council s current and historic recovery performance. Exhibit 4: Recovery performance Performance measure 2009/10 2010/11 2011/12 Total HB debt 2,071,492 1,728,102 2,434,828 HB debt recovered 983,538 846,316 1,241,194 % recovered of total HB debt 47% 49% 51% Source: Dumfries & Galloway Council 62. In addition, there are financial targets for the annual amount recovered and to reduce the amount of HB debt outstanding. At January 2013, the current year's performance was: 628,230 recovered against an annual target of 700,000 a reduction in HB debt outstanding of 1,045,500 against a target of 1,000,000. 63. The service implemented an overpayment recovery module in March 2012 which has enabled greater automation of the recovery processes and helped deliver increased and maximised recovery from on-going benefit and from DWP Debt Management. 64. In addition, the service is about to enter into a contract with a private provider to further increase recovery levels. 65. Audit Scotland identified risks to continuous improvement during the previous risk assessment. We found there was no audit trail detailing the number of overpayment decisions checked, the number and type of errors found and the causes of such overpayments. In Dumfries & Galloway Council Page 13
Delivering outcomes addition there was no routine analysis of overpayments raised to identify any necessary changes or additions to processes, procedures or training that could improve accuracy and minimise official error. These risks have been addressed and overpayments are analysed monthly by the two Benefits Managers to identify any required training or procedural issues that need to be addressed. Appeals and Reconsiderations 66. Customers who disagree with the council s decision on the manner in which their benefit application is processed have a right to request the claim to be reconsidered, and to appeal against the decision. Exhibit 5 illustrates the council s current and historic performance. Exhibit 5: Performance in dealing with appeals and request for reconsideration Reconsideration actioned and notified within four weeks Target 100% Appeals submitted to the Tribunals Service within three months Target 100% 2010/11 96% 98% 2011/12 99% 100% 2012/13 (YTD Jan) 91% 100% Source: Dumfries & Galloway Council 67. The council reports that the number of reconsideration and appeals has significantly reduced over the last four years due to enhanced information fully explaining decisions that have been made and the reasons for doing so. 68. Robust performance management helps ensure that all reconsiderations and appeals are dealt with effectively and in good time. Counter-fraud 69. The prevention, detection and investigation of fraudulent claims are important aspects of a secure and effective benefits service. Counter-fraud activities help to protect public funds by ensuring that fraudulent claims are identified and sanctions are applied where appropriate. 70. A new fraud team was established from 2011/12 and fraud and sanction policies were developed to provide guidance. Exhibit 6 illustrates the council s current and historic performance. Page 14 Dumfries & Galloway Council
Delivering outcomes Exhibit 6: Benefit fraud sanctions performance Sanction type 2010/11 2011/12 2012/13 (YTD Jan) Administrative Cautions 35 43 14 Administrative Penalties 6 12 4 Referred for prosecution 10 10 11 Total 51 65 29 Source: Dumfries & Galloway Council 71. The service has found that the prompt reporting of changes of circumstances through ATLAS has reduced the number of fraud referrals it now receives as claims are corrected before overpayments occur or reach a level at which a fraud investigation would be appropriate. 72. Fraud results and news are discussed with benefits staff during their monthly update to encourage fraud referrals from that source. 73. To ensure that fraud resources are effectively targeted monthly management checks are carried out on live and closed investigations, and each year there is an evaluation of results to inform future risk profiling. Senior managers are provided with detailed monthly performance and situation reports 74. Audit Scotland identified risks to continuous improvement during the previous risk assessment. We found the council had not complied with the policy as sanction decisions had been made solely by the Fraud Manager who was actively involved in investigations. This risk has been addressed as the Revenues and Benefits Manager carries out validation checks on sanction decisions. Dumfries & Galloway Council Page 15
Appendix A Appendix A Progress against action plan dated October 2008 Risk identified Completion Addressed in date full? The council has not consulted with its benefits service customers, the wider community and its private landlords on the level and type of benefits service they need. Annual business plans do not detail the performance targets to be achieved and the key activities the council will carry out to achieve them. There is no systematic reporting on benefits administration and counter-fraud performance to senior officers in Financial Services on the four benefits related performance indicators in the Office of the Chief Executive, Corporate Services and Financial Services Strategic Plan 2008 2011. Importantly, benefit administration was identified as a vulnerable area for both 2007/08 and 2008/09 in the council s 2006/07 Statutory Performance Indicator Summary Report, yet no officer senior to the Operations Manager Revenues and Exchequer Services monitors performance. There is no audit trail detailing the number of overpayment decisions checked, the number and type of errors found and the causes of such overpayments. There is no routine analysis of overpayments raised to identify any necessary changes or additions to processes, procedures or training that could improve accuracy and minimise official error. The council does not have effective processes in place to routinely gather and analyse information on the effectiveness of its risk criteria to ensure its interventions activity is targeted effectively. The Benefit Fraud Sanction Policy dated October 2006 states that decisions on sanctions will be taken by the Principal Officer (Revenues) or the Operations Manager Revenues and Exchequer Services. The council has not complied with its policy as sanction decisions have been made by the Fraud Manager. To ensure impartiality and equality of treatment this should not happen. It is understood that policy and working practices in this area are under review. Mar-09 Mar-09 Jun-09 Apr-09 Apr-09 Mar-09 Oct-08 Yes No Yes Yes Yes Yes Yes Page 16 Dumfries & Galloway Council