House of Commons - Public Accounts

Select Committee on Public Accounts Thirty-Sixth Report

2 TACKLING THE CONSEQUENCES OF COMPLEXITY

7. The complexity of the benefits system has a range of consequences for the Department and its customers (Figure 3). Complexity is a factor contributing to the high rates of errors in benefits, as well as a creating a climate in which fraud may occur more easily. Together, these are estimated at £2.6 billion in 2004-05.[14] A mistake of some kind is made in 20% of benefit decisions, often because of the complex processes involved. Mistakes generate appeals, 230,000 of which were received by the Appeals Service in 2003, and 45% of which were successful.[15]

Figure 3: The consequences of complexity

8. The Department recognises that it needs to focus more on error rates, which have grown during a period of organisational churn.[16] The main areas where staff make mistakes are closely related to the main causes of complexity, including misunderstanding of fundamental entitlement, incorrect award of premiums and problems with the interfaces between benefits, as well as arithmetical and transcription errors. The Department has directed increased training effort to offices known to have high error rates, and is introducing standard models for benefit processing. It now believes it needs to find new ways of motivating staff to reduce error rates to help towards removing the qualification of its accounts, which has now occurred for the last 16 years. It has still to implement a strategy with long and short term measures to go beyond the steps already taken.[17]

9. Complexity is a factor leading to errors by customers. Some may be confused about what information to declare and what changes of circumstances to report. This is an issue even if the initial claim process has been made easier. The Department has made some changes, for instance requiring pensioners to report changes of circumstances less often and abolishing the need to make a new claim for Housing Benefit annually. But improving forms and alerting people to requirements has not worked, and the Department has commissioned research into the particular difficulties people have in understanding what is required.[18]

10. The link between complexity and fraud is less clear cut but it seems likely that complexity creates an environment in which it is easier for customers not to provide information, or to delay providing it, and makes it more difficult to verify the information submitted. The Department has managed to reduce fraud in Income Support, Jobseeker's Allowance and Pension Credit from 5.9% of benefit expenditure in 1997-98 to 2.6% in 2003-04 according to its own estimates.

11. Complexity also contributes to low take-up of benefits such as Pension Credit or Housing Benefit among pensioners. It makes it difficult for some customers to understand their entitlements and for staff to provide clear and accurate information to them. The Department has been making efforts to improve take-up, in part by reducing the complexity of the claim process for pensioner benefits, and by offering Pension Credit claimants the opportunity to complete Council Tax Benefit claim forms over the telephone.[19] The Pensions Commission's work shows that the complexity of the state pension system and its interaction with private pension regulations have played a part in deterring saving for retirement.[20]

12. The replacement of paper-based processes for many benefits with arrangements for forms to be completed by telephone has the potential to make claiming benefits easier for some customers. Telephone claim processes are now available for retirement pension, Pension Credit and the benefits administered by Jobcentre Plus, including Housing Benefit, where they will collect the information and forward it to the local authority. The Department has also shortened the claim form and reduced information requirements for many benefits; harmonised rules, for instance between Jobseekers Allowance, Income Support, Housing Benefit and Council Tax Benefit; and improved data sharing.[21]

13. However, there is still some way to go in making claiming benefits simple. Disability Living Allowance, one of the most complex benefits, still requires completion of a long application form.[22] Many people have had difficulties getting through to contact centres. People who cannot easily claim by telephone need other routes to be available, and the paper forms for some benefits are still lengthy. Although Jobcentre Plus customers have access to financial assessors, and The Pension Service local service should be available to people who are unable or unwilling to use the phone, in County Durham at least this service is not widely known either to pensioners or to the local Citizens Advice service.[23]

14. The Department faces a major challenge to deliver a high standard of service at the same time as reducing its staff by 30,000. Furthermore, the organisational changes mean staff are moving around and between agencies and the Department acknowledged that organisation churn was having an effect on the quality of service. It also has to deal with high levels of staff sickness absence.[24] Delivering these changes without reducing customer service can only be achieved by developing more efficient processes, supported by better use of information technology. But the Department has had well-publicised difficulties introducing new systems to support new processes, including problems with the child support system and the Customer Management System within Jobcentre Plus.[25]

15. Providing better information to customers also requires well trained staff with easy access to necessary information. The Department gives an average of 6.5 days of staff training a year. The Department has made the huge volumes of guidance required on benefits more accessible to staff by providing it electronically and putting in place a telephone support line.[26] But although two thirds of staff feel confident that they have the training and knowledge they need, one third do not. Some are reluctant to give advice for fear of misleading customers, yet the 1.3 million benefit-related cases a year dealt with by Citizen's Advice alone show the scale of the need for assistance.[27]

16. The Department also needs to communicate clearly with the public in its letters, forms and leaflets. It has made improvements to forms and leaflets, some of which have a Plain English campaign Crystalmark. However, the Comptroller and Auditor General's Report included examples of letters which were incomprehensible to the Department's management, let alone the recipient. There appears to have been limited progress since promises were made to this Committee in 2003 and since Ministers expressed concerns about the standards of letters in 1999.[28]

14 Department for Work and Pensions Resource Account 2004-05, January 2006 Back

15 C&AG's Report, paras 3.3-3.4, 3.16-3.17; Q 8 Back

16 C&AG's Report, paras 3.7-3.9; Qq 95, 99 Back

17 C&AG's Report, para 3.5; Qq 35, 101, 113-114 Back

18 C&AG's Report, para 3.6; Qq 31-32, 70 Back

19 Qq 33-34, 45; C&AG's Report, para 3.10 Back

20 Qq 46-51, 62-63; 2^nd Report of the Pension Commission, A new pension settlement for the Twenty-first Century, 2005 Back

21 C&AG's Report, Annex 1; Qq 3, 60, 80-81, 98 Back

22 Qq 82-83 Back

23 Qq 69, 71-72, 79-80, 97 Back

24 Qq 8-9, 108-109 Back

25 Q 11; C&AG's Report, para 4.17 Back