Agenda item

Report of Director of Finance

This report provides an update on the revenues and benefits service and current performance of the benefits service.

The Panel received a report of the Shared Director of Finance providing an update on the Revenues and Benefits service as requested at the meeting in September.  The Shared Director of Finance reported that the number of change of circumstance documents was under 1,000.  At the beginning of the year it had been over 3,000.

Councillor Counter said that this was an impressive reduction.  The Chair, Councillor Dhindsa, commented that this was expected as the outstanding applications had taken a long time to clear.

The Shared Director of Finance referred the Panel to Appendix 1 to the report which set out comparison information related to the recovery of overpaid Housing Benefit.  The second table showed that Watford had improved to second highest authority in Hertfordshire for the collection of overpayments.  She explained the methods local authorities could use to recover overpayments, including attachment to earnings and placing charging orders on properties.

The Shared Director of Finance introduced the new Interim Head of Revenues and Benefits who had started on Monday.  She added that the service was still seeking an Interim Revenues Manager:  The candidate who had been offered the post had declined the position.

The Vice-Chair, Councillor Rackett, said that members had been frustrated over the progress in clearing the backlog of applications.  It was good to see the improvement.  The comparative data showed that most authorities were challenged in this respect.  He acknowledged that the progress was moving in the right direction but cautioned that the service should not become complacent. 

Councillor Derbyshire referred to the Chair’s earlier comment and said that the staff should be congratulated.  He mentioned the comparative data and that Watford was in the top half of authorities for the speed of processing new applications. 

Councillor Derbyshire then commented on the Chair’s recent letter to the Watford Observer.  He reminded Members of the content of paragraph 4.1 in the September report to the Panel.  He added that the Chair’s letter had failed to mention that it was necessary to take account of the income recovered from claimants who had received overpayments. 

Councillor Johnson also referred to the Chair’s letter and said that the Chair had politicised the Panel. He felt an apology would be appropriate.

Councillor Taylor noted that overpayments arose as a result of claimants not informing the Council of any changes in their circumstances and due to local authority error.  He had observed that the amount recovered was not split to show how much had been collected for each of the reasons.

Following Councillor Turmaine’s congratulations to staff for the improvement and his questions, the Shared Director of Finance advised that she could not explain the improvements to the recovery rate of overpayments, but it was possibly due to improved recovery processes.  She added that the processing times were set by the Shared Services Joint Committee and were based on calendar days.

The Chair referred to the original report in the Watford Observer and both his and Councillor Martins’ comments.  He congratulated the staff for their work; they had eventually caught up with the backlog but it had taken a long time.  The service had spent significant funds on agency staff and consultants.  The Council’s staff had to take time to teach the agency staff, who often would leave after a short period.  He felt the Council should have employed additional permanent staff.

The Chair stated that Watford had raised the most overpayments compared to the rest of the county.  He asked if officers could explain how much had been recovered in respect of overpayments due to local authority error.

The Shared Director of Finance explained the reasons an overpayment might be classified as a local authority error.  She added that the External Auditor had no concerns over the way the authority calculated this.  She stated that the local authority errors were due to process timings and not just processing errors made by staff.  She explained how the subsidy was calculated, which had been included in the September report.  She confirmed that in the last two years the Council had received 0% subsidy for local authority errors.  In response to the Chair’s final question, the Shared Director of Finance explained that it was not possible to provide a breakdown of the overpayment recovered and whether it was in relation to claimant delays or local authority error.

Councillor Khan, a non-Panel Member, referred to a report written by the Department for Works and Pensions which had commented on the state of the Revenues and Benefits service and to the External Auditor’s report for 2012/13.  He felt that the comments made by the Auditor about the Council’s service were embarrassing and that there were issues that needed to be resolved.  The updates to the ATLAS system had caused delays.  He added that some of the figures indicated 6% over the actual amount paid out in benefits and questioned this fact.

The Shared Director of Finance informed the Panel that it was possible to claim up to 140% of overpayments.  If an error was due to a claimant, the Council would receive 40% from Central Government and be able to claim back 100% from the claimant.  This was permitted under the Housing Benefits regulations.

Councillor Martins stated that the reason scrutiny worked was due to Members being able to discuss matters openly with no political bias.  The letter sent to the Watford Observer by the Chair had politicised the matter.  He urged the Chair to remind Members to be open in their discussions.  Councillor Martins added that at the last meeting he had sought assurances that the processing problems were being corrected.  The report on this agenda had set out the improvements.  The problem had arisen some time ago and he acknowledged that it took time to improve matters.  He had confidence in the Section 151 officer and that the service would be improved.

Councillor Martins said that he had noted references to the Shared Services Joint Committee.  He reminded Members that Councillor Khan had been a Member of that committee and had had an opportunity to put pressure on the committee to ensure the situation in the service improved.  He felt that the officers should be congratulated for the pace of improvement in the service.

The Chair again referred to the original report in the Watford Observer and that his subsequent letter was in response to a letter by the Portfolio Holder.  He felt that the Portfolio Holder had been the first Member to politicise the debate.  He stated that council meetings were political.

Councillor Counter said that this had been a long standing problem.  She understood that even though the Council might not receive a grant from Central Government, the overpayment could still be recovered from claimants.  Some of the discussion appeared to give the impression that there was a massive deficit; this did not appear to be correct.

Councillor Watkin, Portfolio Holder for Shared Services, informed the Panel that the governing body for Shared Services, including Revenues and Benefits, was the Three Rivers and Watford Shared Services Joint Committee.  He confirmed that Councillor Khan had been a member of the Joint Committee. 

The Portfolio Holder added that he wished to thank the staff for their work.  The Section 151 officer had explained the situation.  Members were able to make comparisons with other Hertfordshire authorities.  He looked forward to further improvements in the service.

Following the Chair’s comments about temporary staff, the Portfolio Holder advised that temporary staff had been employed due to the uncertainty about Universal Credit.  The introduction of Universal Credit could mean that there would need to be major changes to the service.  If permanent staff had been employed, redundancies may have needed to be made once it had been introduced.  Due to the uncertainty of when Universal Credit would be introduced, it had been decided to recruit permanent staff.

Councillor Bell, a non-Panel Member, agreed that the staff should be congratulated for their work.  They had been under pressure.  He commented that there was a lack of resources in Revenues and Benefits.  The external contractors had not been on the frontline unlike the Council’s staff.  He said that when ex-Councillor Wylie had been the financial Portfolio Holder, he had done his utmost to tackle the issues in the service.

Councillor Bell referred to the criticism aimed at Councillor Khan and his role on the Shared Services Joint Committee.  Councillor Khan was the only Labour representative on a committee of six members.  He suggested Members should read the Shared Services Joint Committee minutes as these showed that Councillor Khan had raised concerns about the service.  This year, Councillor Bell advised that he had been appointed to the Shared Services Joint Committee and had also raised concerns.  He was aware that the service was continually monitored by Overview and Scrutiny Committee and Budget Panel.  The previous Head of Revenues and Benefits had attended Overview and Scrutiny Committee to respond to Members’ concerns.

In response to Councillor Taylor’s question about staff morale, the Shared Director of Finance advised that the morale had been fairly low for some time, however, this had improved over the last six weeks.  The improvement had been due to reaching two milestones; the ATLAS backlog had been cleared and the number of outstanding change in circumstance applications had been reduced.  The service was aware of the press report and this did have an impact on the team.  They had been advised that as officers they did not get involved in political debates.

Councillor Rackett said that Members needed to consider any lessons which could be learnt from the ongoing issues with the service’s performance.  He commented that previously he had pressed for a scrutiny review to be set up to look at the service, however Members had been advised that they should wait and let the service clear the backlog.  He felt that members needed to consider whether a review should have been undertaken at the time.

Councillor Khan informed the Panel that he had chaired the last Overview and Scrutiny Committee and it had been agreed that Revenues and Benefits would become a standing item on the agenda.  The Scrutiny Committee had rigorously scrutinised the service and this had involved all parties on that committee.

Councillor Aron confirmed this and added that the group had worked together on the matter and had not allowed it to become a political debate.

The Portfolio Holder referred to the comments about the scrutiny and governance of the Shared Service.  The question was whether the governance of the service by the Shared Services Joint Committee was appropriate.  It was now recognised that it was not appropriate.  He advised Members that the Director for Corporate Resources and Governance at Three Rivers District Council had carried out a detailed review of the service approximately 18 months ago.  He introduced new methods of work for the service and this had enabled the service to start improving.

The Chair thanked colleagues for their contributions.

RESOLVED –

that the report be noted.