House of Commons Hansard Written Ministerial Statements for 16 Sept 2004 (pt 8)

Pension Protection Fund/Pension Regulator

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): Improving member protection is a Government priority. The Pension Protection Fund and the Pensions Regulator form the basis of providing such protection and successful introduction of both organisations is a priority of this Government.

As the Pensions Bill is continuing its passage through the House there has been cross-party support for the principles behind both the Pension Protection Fund and the Pensions Regulator and the desire to provide protection for individuals as soon as possible.

The intention, subject to parliamentary approval, is to achieve successful introduction of both organisations by April 2005. This timetable is very challenging and in

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order to make this date a reality it is necessary for the Department for Work and Pensions to carry out essential activities in advance of the legislation receiving Royal Assent.

Therefore, Parliamentary approval for additional resources of £477,000 for these new services will be sought in a supplementary estimate for the Department for Work and Pensions as soon as legislation is passed. Pending that approval, this urgent expenditure will be met by repayable cash advances from the contingency fund.

In addition, although no cash advance is required, the Department for Work and Pensions will be agreeing to contractual and lease arrangements in respect of accommodation in Croydon, where the staff of the Pension Protection Fund will be located. These negotiations are ongoing, however the Department will endeavour to keep resource consequences to a minimum. When these costs are known the Department will inform the House.

Croydon was chosen as it met the three key criteria, essential to ensure that the Pension Protection Fund can operate with optimum effectiveness and efficiency, within the required deadline. These key criteria are: achieving successful implementation—which includes direct links and proximity to both the Pension Regulator in Brighton and key stakeholders in London; ability to recruit the right staff and value for money.

London Borough of Enfield

Following the housing Green Paper "Quality and Choice: A Decent Home for All", published in April 2000, the Department for Work and Pensions developed a performance framework for housing benefits. The "Performance Standards for Housing Benefits" allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. They are the standards that the Department for Work and Pensions expects local authorities to aspire to and achieve in time.

In 2002–03, London Borough of Enfield Council administered nearly £123 million in housing benefits, representing some 17.5 per cent of its gross revenue expenditure.

The report concludes that the council had made sustained improvements in some important areas since the initial inspection of the benefits service in September 2002.

Between September 2002 and March 2004 it had reduced its backlog of work of some 6,800 items to 1,882 and made significant improvements in processing new benefit claims, reducing the time taken to determine claims from 67 days on average in 2002–03 to 41 days by February 2004.

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The council had made organisational changes to strengthen its stand against benefit fraud. It had increased the number of investigators, leading to improvements in the quality of investigative work and the number of sanctions being applied to fraudsters.

However the council needs to improve the identification, classification and recovery of benefit overpayments.

The report makes recommendations to help the council address weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter-fraud activities.

My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the BFFs findings and recommendations.

Teesdale District Council

In 2002–03, Teesdale district council administered nearly £4.56 million in housing benefits, about 43.3 per cent. of its gross revenue expenditure.

BFI's report identifies a number of significant concerns. Some strategic management policies were lacking and this meant that managers and staff did not have a clear understanding of what was essential to deliver a high quality service.

Below this, a lack of procedural guidance hindered benefits administration and counter-fraud work. Processes were based on custom and practice, which meant that staff had no reference materials and there was no assurance safeguards for new staff. Despite the lack of documented policies and procedures, the standard of work in many areas was generally good and the report notes the improvement in claims processing times which were just outside the upper quartile performance for all local authorities in the United Kingdom.

Particular weaknesses were found, however, in customer services. A best value benefits satisfaction survey that was due in 2003 had not been undertaken. There had been no measurement of customer waiting times or assessment of the telephone service provided.

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No formal take-up strategy was in place and BFI concluded that the council was not providing adequate information to current or potential customers.

The report found that informal working relationships between departments in the council had resulted in poor communications that were detrimental to benefits service customers. The housing unit had sent repossession notices to council tenants with rent arrears even when the arrears were due to benefit claims not having been processed.

The report raises concern that there had been little work undertaken to recover overpayments. This had resulted in an accruing debt and consequential loss of available funds to the council. Although it was still to achieve its first successful prosecution, the application of other sanctions was an encouraging sign that the council was establishing an effective counter-fraud operation.

The report makes recommendations to help the council address weaknesses and to further improve the administration of housing benefit and council tax benefit, as well as counter-fraud activities.

My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the BFI's findings and recommendations.

Inspection Report of the Benefit Fraud inspectorate in Respect of Swindon Borough Council

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) inspection report on Swindon Borough Council was published today and copies of the report have been placed in the Library. Following the housing Green Paper "Quality and Choice: A Decent Home for All", published in April 2000, the Department for Work and Pensions developed a performance framework for housing benefits. The "Performance Standards for Housing Benefits" allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. They are the standards that the Department for Work and Pensions expects local authorities to aspire to and achieve in time.

In 2002–03, Swindon Borough Council administered some £34 million in housing benefits, about 13 per cent. of its gross revenue expenditure.

The report concludes that the council had made sustained improvements in some important areas since the current contractor took responsibility for the Benefits service in August 2002.

Between August 2002 and January 2003 it had cleared its backlog of work of some 9,400 cases and made significant improvements in processing new benefit claims, reducing the time taken to determine claims from 89 days on average in 2002–03 to 59 days in 2003–04.

It had also carried out a number of good quality fraud investigations, prosecuting eight benefit fraudsters during 2003–04.

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However, the council needs to develop a strategic management infrastructure to enable effective management and monitoring of the benefit service. This will also provide senior managers and elected Members with assurance that recommendations from auditors and other regulators are implemented.

The council also needs to do more to process claims accurately, prevent and deter benefit fraud and recover the £2.58 million of housing benefit debt outstanding.

The council have asked for help from the BFI's performance improvement action team.

The report makes recommendations to help the council address weaknesses and to further improve the administration of housing benefit and council tax benefit, as well as counter-fraud activities.

My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the BFI's findings and recommendations.

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