Matt Weaver
Wednesday October 31, 2001
The Guardian

Privatising services could be the solution to the “error, waste and fraud” that characterises administration of housing benefit, the audit commission claims today. Yet inquiries by the Guardian suggest a clear link between the worst performing benefit services and privatisation.

A report by the commission says long delays in housing benefit payment are causing hardship, anxiety and even the threat of eviction for claimants. It recommends councils consider “outsourcing” benefit administration as part of a package of measures to improve the service.

The report says some councils, particularly in London, are “open to challenge” because they are taking more than 100 days to process new claims. It adds: “Outsourcing, and partnerships with other councils, or with the private sector, are potential solutions.”

However, there are 14 local authority areas in England where new claims took more than 100 days on average to process in the last financial year. In nine of these, benefit was administered by a private contractor rather than the council.

In the capital, the picture is even starker. All eight of the London boroughs which took more than 100 days to pay a new claim last year had contracted out their benefit administration. Of these, Hackney and Lambeth now provide the service in-house, with Newham and Waltham Forest planning to do the same.

Of the 13 London boroughs which contracted out their services last year, the average time to process a new claim was 117 days. Of the 19 remaining boroughs with in-house administration, the average was 52.

Greg Birdseye, director of the audit commission’s project, says: “Local authorities need to focus on how to get their housing benefit service working. There are a range of things they can do, one of which is outsourcing.”

Liz Phelps, social policy officer of the National Association of Citizens Advice Bureaux, was a member of the commission’s advisory group on the report, Housing Benefit Administration. But she queries its conclusions on contracting-out. “Our evidence is that thousands of [our] clients have received a disastrous service from contracted-out housing benefit services,” says Phelps.