Agenda item

The Director of Finance submits a report requested by the Committee at its meeting in February on the Housing Benefit Subsidy arrangements for the authority.  The report explains the Subsidy Audit process and its findings and includes the Benefits Team Improvement Action Plan to improve the accuracy and to subsequently reduce the clawback of monies against the clawback fund.  

The Committee is requested to note and comment on the findings highlighted in the report and on the improvement and communication plans as appropriate.  

The Director of Finance submitted a report for noting as requested by the Committee at its meeting on 10 February 2016 on the Housing Benefit Subsidy arrangements for the authority.  The report explained the Subsidy Audit process and its findings and included the Benefits Team Improvement Action Plan to improve the accuracy and to subsequently reduce the clawback of monies against the general fund.

James Hudson Quality and Performance Manager,  Revenues & Customer Support, presented the report.

The Committee noted that:

·         Every year all local authorities submitted a Housing Benefit Subsidy claim to the Department for Work & Pensions (DWP).

·         The difference between the subsidy claimed and the amount received back was met by the authority’s general fund.

·         Two main reasons the authority did not receive the full subsidy were:

o   Overpayments, 90% of which were the fault of the claimant, for example, claimants’ delay in notifying the authority of a change in circumstances;

o   Qualification of the subsidy claim, which was not confined to Leicester but was improving.

·         There were a number of ways the authority could try to mitigate the shortfall in subsidy, though there were barriers due to the complexity of the scheme and changes to regulations. There had also been a 10-13% reduction in the Housing Benefit Administration Grant for the scheme year on year. Ways to mitigate loss included:

o   Reduce the number of overpayments created by authority error;

o   Keep the audit qualification loss to a minimum;

o   Ensure all entitlement to a subsidy was claimed;

o   Maximise the recovery of outstanding overpayments.

·         Performance management actions were in place to address the issue of human error in Housing Benefit assessments, including regular quality checks on officer’s work. A full refresher training programme was also in place.

·         An awareness campaign was planned to encourage people and make it easier for them to contact the authority about a change in circumstances. An online form to report changes was introduced in April 2016.

·         The authority had successfully bid for funds from the DWP through the Fraud & Error Reduction Incentive Scheme (FERIS) for pay for two staff to proactively target claims with known undeclared changes in circumstances.

·         The Subsidy Audit required significant resources with eight staff members working 9-11 months a year on errors. If the awareness campaign continued to have an impact, it would reduce overpayments.

·         Staff morale had been under challenging circumstances since 2012 when the roll out of Universal Credit was announced.

·         The Real Time Initiative (RTI) was a DWP programme that data-matching of Housing Benefit claims and HMRC data could identify overpayments due to income changes.

Members raised questions and received the following responses:

·                  A proportion of claims were checked for accuracy to reduce errors. Due to capacity it was not possible to check all claims.

·                  Housing Benefit overpayment was one of the hardest to recover as it was usually paid to the least well-off households. A deduction from ongoing benefit was carefully calculated to prevent hardship to the claimant, and tended to be low levels of repayment over a period of time.

·                  It was noted that in other countries, if there was a change in circumstances it would show on a system and information was automatically shared between agencies. It was suggested that a shared information system should also be introduced in England. The Head of Revenues & Customer Support agreed to explore with the Communications team updating the service communication plan and refresh posters and correspondence advising claimants of the need to inform agencies separately of a change in circumstances.

·                  Members enquired as to what the legal period was for the recovery of an overpayment. The Director of Finance said a paper on the pursuance of debt would be brought to a future meeting, but following legal advice, the council would pursue as long as was necessary if persons had received payments they were not entitled to.

·                  There was a specialist team that worked with claimants who were in part-time work or zero hours contracts.

RESOLVED:

That:

1.          the report be noted;

2.          the Head of Revenues & Customer Support update the service communication  plan  and consider refreshing posters advising claimants of the need to inform agencies separately of a change in circumstances;

3.          the Director of Finance bring a paper on the pursuance of debt through overpayment of Housing Benefit be brought to a future meeting.