Housing Benefit Fraud & Error: DWP working with local - PowerPoint PPT Presentation

Housing Benefit Fraud & Error: DWP working with local authorities to tackle Fraud & Error Clare Elliott DWP Deputy Director, Housing Delivery and Operations Finance District Council Treasurers Meeting 9 January 2015

Context • Introduction • Fraud and Error • NAO Recommendations • RTI Bulk Data Matching Initiative • Fraud and Error Reduction Incentive Scheme • Working with local authorities Department for Work & Pensions 2

Housing Benefit overpayments over time £1600m 6.0% 6.0% 5.5% £1400m 5.5% Monetary Value of Expenditure Overpaid 5.0% 5.1% 5.1% Percentage Expenditure Overpaid 4.9% £1200m 4.5% 4.7% 4.7% 4.6% 4.6% 4.0% £1000m 3.5% £800m 3.0% 2.5% £600m 2.0% £400m 1.5% 1.0% £200m 0.5% £0m 0.0% 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Fraud (£m) Claimant Error (£m) Official Error (£m) Total Fraud and Error (£m) %Fraud %Claimant Error %Official Error %MVFE Since 2011/12, HB F&E has been getting worse.

Housing Benefit 2013/14: What was incorrect about the claims? £700m £600m OE CE £500m Fraud £400m £300m £200m £100m £0m l d s y g s r s r t e n s t s s e s a n n e e t c e a l o n n t n m t m t b s i i e e h h i n o f o d i o i i p o t e t m a t m o t u t e e i r i r i i C e v O a e s o t n s i b c d c r m e y g i C o e n c p n C t A i u o c l g s e o a p b e t s d i n e l r T a r m p P x r t s e e n t r P i R a n a m l s e h o D g o E c P T U u h t n C E c r O o f t t t O i / O n o t n v H d s n o a i g L s a l o C d n n m h n o i e n e i i a r t s p i a l d u C e E n o D o H - C n o N Finding a way to reduce overpayments due to earnings is critical!

How do the four claimant groups contribute to the overall MVFE level? 7.0% Working Age Standard Working Age Passported Pensioner Standard Pensioner Passported 6.0% 0.5% 0.5% 0.5% 5.0% 0.5% 0.3% 0.4% % expenditure overpaid 0.4% 0.4% 0.4% 0.6% 0.5% 0.5% 0.5% 1.4% 0.4% 0.4% 0.3% 4.0% 0.5% 0.5% 1.1% 1.6% 2.3% 1.5% 1.7% 2.1% 1.2% 3.0% 1.8% 2.0% 3.6% 3.1% 2.5% 2.4% 2.4% 2.3% 2.1% 2.0% 1.0% 1.9% 0.0% 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14

% expenditure overpaid 10% 11% 12% 13% 14% 15% 16% 17% 18% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Apr05-Mar06 Apr06-Mar07 because that is where the majority of the earnings overpayments occur. % MVFE in the Working Age Standard group is always the highest, Apr07-Mar08 Working Age Apr08-Mar09 Standard Apr09-Mar10 What is the level of F&E within each Claimant Group? Apr10-Mar11 Apr11-Mar12 Apr12-Mar13 Apr13-Mar14 Apr05-Mar06 Apr06-Mar07 Apr07-Mar08 Working Age Passported Apr08-Mar09 Apr09-Mar10 Apr10-Mar11 Apr11-Mar12 Apr12-Mar13 Apr13-Mar14 Apr05-Mar06 Apr06-Mar07 Pensioner Standard Apr07-Mar08 Apr08-Mar09 Apr09-Mar10 Claimant Error Fraud Official Error Apr10-Mar11 Apr11-Mar12 Apr12-Mar13 Apr13-Mar14 Apr05-Mar06 Pensioner Passported Apr06-Mar07 Apr07-Mar08 Apr08-Mar09 Apr09-Mar10 Apr10-Mar11 Apr11-Mar12 Apr12-Mar13 Apr13-Mar14

Performance variation Prosecutions Total Sanctions HBMS + Ad Pens Debt Changes of New Claims Per 1000 Referrals Per 1000 Recovery Circumstance Caseload Outstanding caseload GB Worst Performance 63 42 0.22 0.11 0% 100% GB Bottom Quartile 28 12 2.45 1.63 62% 63% GB Median 22 9 1.22 2.41 68% 39% GB Top Quartile 18 6 2.39 3.72 75% 24% GB Best Performance 5 1 24.35 22.32 114% 0% Department for Work & Pensions 7

NAO recommendations • Set out clearer responsibilities for reducing fraud and error • Improve incentives to prevent and identify fraud and error, and align these with the Department's own aim • Improve the quality of information about fraud and error in oversight and assurance processes • Develop a plan that addresses major areas of risk • Align work by identifying and profiling risky cases • Exploit data and strengthen fraud and error controls Department for Work & Pensions 8

Real Time Information (RTI) • rolled out across all local authorities from 6 October 2014 • HB systems enhanced to manage referrals and present the data to local authorities • reports of high value overpayments and several authorities reporting average overpayments of around £900 • last tranche of referrals will take place in February 2015 • on-going discussions to explore how this can be extended into 2015-16 Department for Work & Pensions 9

Fraud and Error Reduction Incentive Scheme (FERIS) 1 • estimated loss due to HB Fraud and Error at £1.45 billion, up 19% on previous year • in response, Fraud and Error Reduction Incentive Scheme launched on 24 November • financial reward to local authorities • up to £38.5 million for 2014/15 and 2015/16 • DWP Performance Development Team support Department for Work & Pensions 10

Fraud and Error Reduction Incentive Scheme (FERIS) 2 • Funding for 2014/15 and 2015/16 is £36 million - based on estimates of LA take-up and proportion of LAs meeting the thresholds 2014/15 • Incentive payments estimated at a maximum of £6 million if all LAs meet lower threshold, and £12 million if all LAs meet upper threshold • £6.2 million start-up fund (if all LAs applied) • £3 million bid fund (discretionary distribution) 2015/16: • £9.4 million maintenance fund (if all LAs applied) • Baselines and thresholds for 2015/16 will be confirmed later in 2015 NB: the above maximum figures add up to more than £36m, we estimate not all LAs will meet the upper threshold, apply for start-up, bid fund or maintenance fund. Department for Work & Pensions 11

What we are doing • reducing burden with more data sharing • ETD/ATLAS merger • Updating HB FED Strategy: focusing on data sharing, claimant behaviour, incentives for local authorities and policy & legislation • review of subsidy and certification • better planning horizon for admin subsidy Department for Work & Pensions 12

Engagement and support • Meetings • Visits • Expanded consultancy support • Working together • Will challenge you but challenge us back Department for Work & Pensions 13