Agenda item

Report of the Head of Revenues and Benefits

This report provides an overview of the Financial aspects of Revenues and Benefits, with particular reference to Benefit Subsidy, Council Tax and Business Rate Collection Rates.

The Panel received a report of the Head of Revenues and Benefits which provided an overview of the financial aspects of the Revenues and Benefits service.  The report made particular reference to Benefit Subsidy, Council Tax and Business Rates collection information.

Benefit Subsidy

Councillor Jeffree commented that the report was interesting but he was concerned that the Council always appeared to be at risk if a mistake was made.  He accepted that there would be penalties if the Council made a mistake.  He asked whether the Council was able to claim recompense from outside contractors if they were found to have made mistakes when processing claims.  He also enquired if there were any other ways to mitigate against mistakes happening.

The Head of Revenues and Benefits advised that any overpayment carried an element of risk.  The Council had the power to recover any overpayment from the Applicant.    With regard to the contract with the current contractor, it did not contain a penalty clause related to mistakes.  A previous contract had contained a clause which reduced the amount the Council paid for the service if there was a degree of inaccuracy by that contractor.  This arrangement had been offered by the company to promote their service to the Council.  The current contractor was acting on behalf of the Council.  The majority of overpayments could be attributed to delays in processing changes. 

Following a question from Councillor Counter about technical overpayments, the Head of Revenues and Benefits explained that the Council Tax bills were reduced by the Council Tax Benefit for the duration of that bill.  Following a change in the Council Taxpayers circumstances, for example when they were no longer responsible for Council Tax at that property, the bill was apportioned and the Council Tax Benefit was calculated for the relevant period of time.  He assured Members that the Council did not lose out in these cases. 

Councillor Martins said that the overpayment cost to the Council was unsustainable.  He asked what measures needed to be put in place to reduce the cost.

The Chair commented that he was aware that the Housing Benefits overpayments raised in 2010/11 was £1.9 million and then in 2012/13 the figure was over £3 million.

The Head of Revenues and Benefits informed the Panel that overpayments were caused by people forgetting to advise the Council of changes in their circumstances.  The service was currently working on developing an automatic link with the Department of Works and Pensions.  This link would enable the Council to receive automatic updates on changes to pensions and benefits details.  A further reason for the increase in overpayments was that rents had increased over time and therefore the level of overpayment would increase.

The Chair considered the response was unacceptable.  He asked for the officer’s opinion on the level of overpayments expected for the current year.  He felt too many mistakes were made.

The Shared Director of Finance advised that some errors had been created due to the delays in processing the change in circumstance cases.  She was working with the team to reduce the timescales.  It was important to ensure the backlog was cleared and then the service could consider how it could improve the processes for new change of circumstance applications.  Benefit regulations were constantly changing.  The service would need to review the processes and how any unnecessary steps could be removed.  The benefit software had been updated, which meant officers had fewer key strokes to make when processing applications.  The number of days for processing claims had reduced but there were still more improvements to be made.

The Head of Revenues and Benefits informed the Panel that when officers sought to recover the overpayment, there was a maximum amount that could be recovered from a claimant’s current Housing Benefit.  The Council took other steps to recover the overpayment, which, if it had been as a result of fraudulent activity, could include an application for assets to be seized.

The Portfolio Holder highlighted the last paragraph of 4.4 in the report.  This showed that in 2012/13 the Council had recovered £1.9 million of overpaid Housing Benefit which offset the overpayments related to that year and other years. 

The Vice-Chair requested that at the next meeting the Panel was provided with comparative data.

In response to a Member’s question, the Head of Revenues and Benefits advised that the Council did not receive 100% of the rent allowances paid out, as explained in paragraph 4.2 of the report.  For example, there were certain types of accommodation which the Council would only receive a proportion back through the subsidy.  In addition overpayments created by the speed of changes to cases affected this.  The faster changes were processed the lower the overpayment would be.

With regard to mitigation measures, the Head of Revenues and Benefits informed the Panel that officers were using diary tools to act as reminders to contact people direct about changes.  In those cases where people were identified as having a large capital, they were asked to repay the overpayment over a shorter term than the £10.80 per week applicable from Housing Benefit payments.

The Head of Revenues and Benefits confirmed that the subsidy rates were set by Central Government.  If overpayments were kept below a certain level the Council could receive 100% of the subsidy.  Councils were then penalised the higher the overpayment level.

Councillor Taylor asked whether there was any data that showed the backlog of cases was reducing and whether the service was at the national average level of completing claims.

The Shared Director of Finance responded that the backlog was monitored on a daily basis.  The new claims were at about the national average level; however the change in circumstance applications were above the national average but were moving in the right direction.

Council Tax and Non-Domestic Rates – Collection rates

The Chair commented that there had been a significant amount of media coverage regarding bailiffs and the tactics they used.  He asked what control the Council had over the bailiffs it used and whether there was any extra help available for residents.

The Head of Revenues and Benefits explained that the Council worked with two bailiff companies and each one acted as an agent for the Council.  The bailiffs had to abide by legislation.  The companies had taken steps to create good working relationships with the local Citizens Advice Bureaus.  Council staff had shadowed the bailiffs whilst following up on cases in order to see how they worked.  The bailiffs worked to the Council’s instructions.  If they identified vulnerable cases they were instructed to contact Council officers for advice on the next steps to be taken.  Applications were processed as quickly as possible, but if people encountered problems the Council could make payments direct to the landlord rather than the claimant.  If the Housing Benefit was insufficient, those claimants affected by the benefit cap or ‘bedroom tax’ could apply for discretionary housing payments.

The Vice-Chair noted that before the bailiffs were given cases, a summons was issued.  He noted £100 was added to the debt.  He asked whether officers were able to reconsider the costs and make a judgement call if a person usually made regular payments.

The Head of Revenues and Benefits responded that it was possible to put limits on the amounts charged.  Prior to the summons being issued there would have been a bill, reminder and final notice issued.  The £100 charge covered the Council’s costs and the charge levied by the court.  Officers were able to use a degree of flexibility regarding the charges and each case was considered individually.  Officers would take into account the history of the payer and whether they maintained arrangements.

Councillor Martins asked how sensitive officers were to individuals’ circumstances when the bailiffs were sent.  He suggested the Council needed to use reasonable measures and to consider the person’s history.  He asked what criteria was considered before the case was passed to the bailiff.

The Head of Revenues and Benefits explained that once the Council had obtained the Liability Order a letter was sent to all individuals informing them that the order had been granted.  They were given 14 days to contact the Council and discuss payment.  The Council had contacted people three or four times prior to the case being passed to the bailiff.

In response to a question about patterns in the outstanding non-domestic rates debts, the Head of Revenues and Benefits advised that he had looked at the cases and no trends had emerged.  Some of the cases related to disputes about the rateable value and in these cases the Council took the view that it was better to wait until a decision had been made. 

Councillor Counter asked whether officers had considered contacting people on their mobile phone when payments were not being received.  She added that she was aware of people who did not open their letters.

The Head of Revenues and Benefits stated that the Council did not have the resources to contact each case where payments had not been made.  The Shared Director of Finance acknowledged that there were different ways to manage arrears.  Sending text messages to people had been recognised as a good method for some people.

Councillor Meerabux stated that he had listened to the discussion and noted that the service was working in a changing environment.  This in turn put pressures on the system.  There were changes for customers to get used to.  He had sympathy for the staff. 

The Chair spoke about the cost of using agency staff and commented that he felt it would probably be better to employ permanent staff instead.

The Committee and Scrutiny Officer informed the Panel that Overview and Scrutiny Committee regularly monitored the performance statistics related to Housing Benefit.  The Head of Revenues and Benefits had regularly attended the Scrutiny Committee to report on the service’s progress in reducing the backlog.   The reports and minutes of these meetings were available on the Council’s website.  She added that Revenues and Benefits was a shared service with Three Rivers District Council and any decisions were made by the Shared Services Joint Committee.  She reminded the Panel that all Watford Councillors were informed when the Joint Committee’s decision had been published and they were able to call-in any decisions which they were not satisfied with.

The Chair said that he acknowledged there was ample reporting being undertaken, but he was concerned that the service was not making improvements at a sufficient rate.

RESOLVED –

1.      that a report be presented to the next Budget Panel reporting on comparative data with other authorities.

2.      that the Panel’s comments be noted.