There have been early warning signals for some time - delays in payment and shoddy administration have been a concern for years. But it is only now with a combination of factors coming together that the situation has become so explosive (see below).
One main fallout looks set to be a rift between councils and housing associations. Last week it emerged that the patience of the usually diplomatic G14 group of housing associations had snapped. The group denounced 12 councils for providing a particularly poor service in a letter to government.
Others go further. Vicky Stark chief executive of Look Ahead Housing and Care claims that the current crisis of housing benefit is worse than that disaster of the Child Support Agency. She points out that the money involved with housing benefit dwarfs that of the CSA. "It’s terrible, I’ve have been trying to raise it with local authorities for ages but it doesn’t seem to make any difference."
Ben Wilson, Horizon Housing Group's new chief executive, claims it is the system rather than the councils that are to blame. "There are issues about service delivery but there must be questions raised about the inherent nature of the housing benefit system as a whole."
He reckons that housing associations should get together with councils to present a joint case to government to overhaul the system. "The issue is so widespread it must be indicative of problems for the system itself, so we should not personalise it or local authoritise it."
The G14 letter to secretary of state Alistair Darling has already ‘local authoritised’ the issue. But it goes on to urge the Department of Social Security to take responsibility for the problem.
It says: "Whilst we appreciate that it is local government that administers the service on behalf of your department, you are ultimately responsible."
The view on the ground is slightly different. Kevin Farrell, director of supported housing at the Housing Services Agency, points out that if the system is so flawed why is the service fine in some areas and hopeless in others.
"Camden has got an extremely good housing benefit service, they keep it simple and efficient. But go across the road to Islington and it’s a shambles," he claims.
Efficient services appear to be rare, however. HSA estimates that 60 per cent of its debt is due to housing benefit delays.
Farrell says: "Chasing housing benefit is becoming quite farcical. More and more of my staff's time is spent chasing claims, which means they are not getting on with the people work. It our biggest headache."
It was Farrell who used the phase "melt down" to characterise service delivery in some areas. He adds: "The biggest concern is with the clients themselves, we are dealing with vulnerable people who are anxious about rent records, many have a history of evictions in the past and no matter how much reassurance you give they get very anxious."
Some become so worried they flee HSA’s care. "They simply can’t cope with the stress," Farrell says.
Delays - As with any means tested benefit, assessing claims is not quick. Even a straightforward form takes half an hour to fill out, and with housing benefit few are straightforward.
Many claimants go through the Benefits Agency, which can mean more toing and froing for landlords because its standard form does not contain enough of the information that landlords need. There is no section on rent levels, for example.
The National Housing Federation is compiling a growing dossier of problems with housing benefit which it plans to publish in full shortly.
Lengthy delays in processing claims were reported up and down the country. It commonly take months rather than weeks to assess forms. But the slowest authorities appear to be concentrated in London. HSA estimates that the average speed of assessment in Islington and Hackney is six months. It reports that correspondence is often lost, sometimes repeatedly on the same claim, and occassionally whole files can disappear.
And delays seem to be getting worse. Transfer association Dane Housing claims that Congleton’s benefit service has "deteriorated dramatically" since the association transferred from the council last year.
Delays are exacerbated by other problems set out below.
The Four Week Rule - Since October 1996 all new claims for housing benefit have been paid four weeks in arrears. The idea was to cut down on overpayments. But instead it has only compounded existing delays. As the rule only applies to new claimants, housing associations with a high turnover of tenants, including many care providers, first bore the brunt of the changes, and have been hit hardest.
But as more new tenants are affected the rule is now a concern for mainstream associations. Many ook set to fail the Housing Corporation performance standard for arrears by exceeding the 5 per cent limit. The rule is seen as one of the main reasons for pushing associations over that limit. One association in the NHF dossier said that a quarter of its arrears were due to the rule.
Many also reported concerns about the impact on tenants. One said tenants were worried and frustrated because they were always in arrears. While landlords encourage tenants to pay rent up front, the rule also sends out an unhelpful message.
Overpayments - If claimants' circumstances change, their housing benefit levels must change accordingly. If this is not done promptly there is likely to be an overpayment.
Chris Smith, author of Housing Benefit for Housing Managers and a separate guide on overpayments, estimates that a third of all recipients are the subject of an overpaid claim at some stage.
Because benefit is paid direct to housing associations the claim goes to them rather than the tenant.
In the NHF dossier, associations cited total overpayment bills as high as £119,000. And there were claims in individual cases as high as £9,000.
Councils point out that housing associations have a responsibility to ensure that benefit is not overpaid in the first place. Greenwich councillor Pete Challis says: "Performance is a two-way matter. Delays in recovery are a cost to local taxpayers."
But Smith reckons there is widespread council malpractice in this area. "Money is often reclaimed without a notification. That's like sending some one a parking fine without giving a ticket." He adds that housing associations often have good grounds for refusing to pay, but they usually fail to do so in the six weeks allowed.
"And they wonder why local authorities get annoyed with them," he adds.
Out Sourcing - Several councils have opted to contract out their housing benefit service. The companies involved will of course tell you that this has led to an improvement. Capita, for example, claim that in 79 per cent of cases their performance is better than the councils used to be.
This is not the perception from outside.
Of the 12 councils named by the G14, 10 have contracted out the service.
Challis says: "If there is any basis for the claims, the list raises serious questions about the ability of the private sector to deliver housing benefit services."
The longest delays reported in the federation’s dossier were in Islington and Hackney, both are run by ITNET. Farrell says: "The only charitable thing I can say about ITNET is that they did not know what they were getting themselves into." ITNET said it could not discuss indivdual contracts.
New contractors are often keen to change benefit computer systems, which brings its own problems. EDS in Brent, for example, opted to switch off the whole system for a month, while it up-graded equipment.
Smith claims that privately-run services suffer because one of the main ways companies make a profit is by driving wages down or reducing staff numbers.
Verification Framework - As part of a crackdown on fraud councils have been offered funding to adopt the verification framework when assessing claims. Around half of councils have either set up the framework or plan to do so.
Under the scheme claimants have to produce original documents every time they claim benefit.
This tends to slow an already slow process. Benefit offices are not allowed to except copies of documents such as rent books from housing associations.
Claimants have to produce original documents and then post them or take them in to an assessment office for verification. As Smith points out, "claimants quite rightly don't trust their local authority, so they usually take the document in, in person. It is is causing huge delays and huge inconvenience for claimants.
Congleton is one of the areas where the framework was first used.
Allan Smith, director of operations, says it has "significantly impacted on tenants" ability to claim benefit and the speed with which claims are processed which has led to an increase in arrears and impacted upon cash flow."
Source
Housing Today
No comments yet