Friday, 19 November 2010

Another Day, Another Report on Housing Benefit Incompetence

Next week's Audit Committee meeting will have another opportunity to enjoy what is becoming a regular ritual; the presentation of yet another report detailing what a bunch of fuck-ups the housing benefits service is. I say fuck-ups but there is the hint of something more sinister going on, more on that in a bit.

This latest installment consists of NCC's Internal Audit services latest report on the housing benefits service which it seems they now do annually. I wrote about the 2009 edition before. The 2010 version was prepared in February of this year but we only get to see it if it's one of the sample of Internal Audit reports that are put before the Audit Committee. As such it was done at the same time as the report from the Audit Commission that tore HB a new one and resulted in the possibility of them having to pay a £2m subsidy overclaim back to central government. As far as I know that's still under dispute.

So what did this latest report say? Well they picked up on the total lack of quality control that the Audit Commission was so scathing about. This included a lack of checks on claims processed by external firm Mouchel which is just asking for trouble. As a reminder, Mouchel got over £266k of our money in 2008/9 for who knows how much worth of benefit claims processed. I'd want to keep a close eye on that myself.

A very interesting piece of detail concerns the reporting of different types of overpayments. Essentially, it seems that if errors in benefit assessments caused by the council itself (as opposed to claimants) are below a certain level (approx £616k) NCC still gets full subsidy on it. If it's between a certain range (£616k - £693k) only 40% of subsidy is paid and above that latter figure they get none. In other words there's a pretty strong incentive to keep council caused errors down, which makes sense.

Other types of error are treated differently (see para 400 onwards), for example, error caused by claimants always attracts a 40% subsidy. Errors which are the fault of the DWP or HMRC are fully reimbursed.

Now, this wasn't mentioned in the Audit Commission report but it seems that NCC is prone to incorrect classification of overpayments, occurring in 25% of a sample checked by Internal Audit. From the report -

"For 2008-9 we claimed £0.5m LA Error but would receive no subsidy if the figure exceeded £0.7m...

...Failure to follow proper procedures results in incorrect subsidy classification – we understand that, despite training, experienced staff continue to shortcut such a procedure. Our testing of 20 overpayments showed 25% where failure to follow procedure led to overpayment classification errors. Overpayment classification has not been checked since Jun 08."

It's not explicitly stated but by reading between the lines you get the feeling that the results of incorrect classification only go one way i.e. to reduce local authority error and retaining the subsidy. This would not be inconsistent with the Audit Commission's conclusion that a major overpayment of subsidy had occurred.

And the slightly tart statement about 'experienced staff' who 'despite training' tend to 'shortcut' the classification procedures. Which results in lower rates of overpayments caused by local authority error. And more subsidy...

Hmmm. Like I said, it's not explicitly stated.

Anyway, as I've said before, Internal Audit would have to march on the Audit Committee wearing rainbow striped lederhosen carrying a 30ft banner saying 'Housing Benefits Staff Are Wrongly Classifying Overpayments So We Get More Subsidy' before it would even raise an eyebrow. I predict a total lack of concern along with a side order of vague promises including 'action plans*' and 'targeted training' etc next Friday.

*If you ever have the misfortune to work at NCC you will soon notice that they love 'action plans'. Generally speaking, in NCC's usage of the phrase it means close to the exact opposite of what it says resulting in very little action and the absence of anything resembling a plan. At NCC, 'action plans' and 'reports' have become the end in itself, instead of the means to an end.

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