PCS: C4 News report of new deal fraud prompts call for Audit Office inquiry
Tuesday, 30 June 2009
12:00 AM
The Public and Commercial Services Union (PCS) today called for a National Audit Office (NAO) inquiry and a halt to the outsourcing of the Flexible New Deal following reports on tonight's Channel 4 News of fraud involving private companies contracted by the government to help people back to work.
The union expressed deep concern over the findings of the report which highlights how profits are being put before people and how the private sector is failing some of the most vulnerable in society.
The Channel 4 News report broadcast at 7pm this evening highlights allegations of fraud by private companies including Working Links, involving the fabrication of signatures and paperwork and A4e, which involved the placement of people into unsustainable jobs.
Pointing to the report, the union warned that the contracting out of the Flexible New Deal and increased outsourcing of welfare delivery could lead to private sector staff being pressurised to act fraudulently as companies sought to maximise profits through payment by results.
Commenting, Mark Serwotka, PCS general secretary, said: "The fraud uncovered is scandalous and is a stark example of what happens when profits rather than people are put at the heart of the welfare state. Not only is the taxpayer being fleeced, but in some instances people's lives are being toyed with.
"Staff working for private companies in helping people back to work are trying to do a good job, but are under pressure to bend the rules to maximise profits. There is a real danger that this will continue as the government extends the profit motive in the welfare state and outsources key areas and the Flexible New Deal. We urge the government to halt outsourcing areas of the welfare state and for the National Audit Office to investigate what appears to be significant amounts of fraud."
ENDS
Notes to editors:
For further information, interviews and comment please contact Alex Flynn PCS national press officer on 020 7801 2820 or 07833 978216.
PCS, the Public and Commercial Services Union is the union representing civil and public servants in central government. It has more than 300,000 members in over 200 departments and agencies. It also represents workers in parts of government transferred to the private sector. PCS is the UK's sixth largest union and is affiliated to the TUC. The general secretary is Mark Serwotka and the president is Janice Godrich.
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DEPARTMENT FOR WORK AND PENSIONS
21 August 2003
BENEFIT FRAUD INSPECTORATE REPORT: EAST RENFREWSHIRE COUNCIL
The Secretary of State for Work and Pensions, Andrew Smith has today
published a report by the Benefit Fraud Inspectorate (BFI) on the
administration of Housing Benefit and Council Tax Benefit and
counter-fraud activity by East Renfrewshire Council.
BFI inspected the council against the Performance Standards for
housing benefits. The report found that the council was not at
standard for any of the seven functional areas - strategic
management, customer services, processing of claims, working with
landlords, internal security, counter- fraud, and overpayments.
The report found evidence of the council's commitment to improving
its benefits administration as it had increased the numbers of staff
working in this area. However, this increased commitment needed to be
directed by a clear vision for the Benefits service supported by
formal policies and clearly communicated targets.
The council was performing well in some areas of claims processing
with 99 per cent of renewal claims processed before the expiry of the
previous claim, and new claims processed on average in 31 days
compared to the national standard of 36 days. However, the council
needed to do more management checking of cases, and improve its
approach to verifying supporting evidence to meet the national
verification framework. To reach the counter-fraud standard, the
council must ensure that fraud investigations are properly planned
and thoroughly conducted. However, BFI acknowledged that the council
had undertaken some quality fraud investigations.
The council had no specific overpayment policy, and did not do enough
to establish the cause of individual benefit overpayments. The
council did not make use of all the available methods of recovery and
its processes were fragmented and poorly controlled. The council has
responded positively to BFI's recommendations in this area and plans
to change its processes and organisational structure.
In 2001/02, East Renfrewshire Council administered approximately
#11.7 million in housing benefits. This is approximately 7.6 per cent
of its gross revenue expenditure.
BFI is an independent unit within the Department for Work and
Pensions that reports directly to the Secretary of State for Work and
Pensions on the standard of benefit administration and counter-fraud
activity.
Notes to Editors
1. The process for the inspection at East Renfrewshire Council
included an initial fact finding stage, an on-site visit, and
production and clearance of the report. The on-site visit took place
during February 2003.
2. Each BFI inspection report is considered by the Secretary of State
who decides whether any further action is appropriate. The Secretary
of State has powers to issue directions to a local authority to
secure acceptable or minimum standards in performance.
3. In its response to the Housing Green Paper of November 2000, the
Department for Work and Pensions developed a performance framework
for housing benefits. The HB/CTB Performance Standards, published in
April 2002, enable local authorities to make a comprehensive self-
assessment of whether they deliver benefit effectively and securely.
They are the standards that the Department for Work and Pensions
expects local authorities to aspire to and achieve in time.
4. The Department for Work and Pensions has not set a timescale for
when the standards need to be met by local authorities.
5. BFI inspects against the seven functional areas of the Performance
Standards:
- Strategic management - clearly stated aims and action, resources
and monitoring, with effective training and IT
- Customer services - providing an efficient and prompt service that
meets the needs of all claimants and persons with a legitimate
interest in a claim
- Processing of claims - speedy and accurate claims processing with
effective verification
- Working with landlords - to give private landlords the confidence
to let to claimants and to support delivery of social housing
- Internal security - preventing internal fraud
- Counter-fraud - deterring, preventing, detecting and pursuing fraud
- Overpayments - preventing, identifying and recovering overpayments.
6. The HB/CTB Performance Standards can be downloaded from:
www.dwp.gov.uk/housingbenefit/publications/2002.
7. Media copies of the BFI inspection report can be obtained from the
Department for Work and Pensions Press Office on 020 7238 0866.
8. All BFI inspection reports can be found on the BFI website -
www.bfi.gov.uk.
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