Stafford councillor defends performance after £2.5m overpayment
A senior Stafford Borough councillor has defended the authority’s housing benefit performance – after it was revealed that more than £2.5 million had been overpaid to claimants.
In April, at the start of the current financial year, Stafford Borough Council was owed £2.506 million in housing benefit overpayments, a report to Thursday’s cabinet meeting revealed.
But Councillor Mike Smith, cabinet member for resources, said the authority had a low error rate when it came to processing housing benefit claims.
He told fellow cabinet members: “The council does not deliberately overpay a claimant. Overpayments are caused when people claim more than they are entitled to.
“In certain cases this does involve fraud, and when they don’t inform us of changes to their circumstances as they should. Our officers take actions to make sure, as they can, that claimants do notify us of changes, but sometimes they don’t.
“The actual error rate in processing these claims that generates an overpayment is extremely small; in recent years this has ranged from one quarter to one third of one per cent. This low error rate enables the council to be fully reimbursed by the DWP (Department of Work and Pensions), which recognises the difficulty in processing these claims and allows an error rate twice what we achieve before they cease to fully reimburse the council.
“I think you might be surprised to hear the council pays out £1.7m per month in housing benefit, or £20m a year. The arrears that are referred to have accrued over possibly up to 10 years or more.
“We will only write off debts as a last resort, regardless of the time involved, and we will collect over 98.5% of the amount due. In terms of overpayments only 0.08% is currently not subject to recovery action; in Stafford Borough it’s significantly less than the average across the country.
“If we had access to DWP and HMRC (HM Revenue and Customs) records we would do even better. And there are moves afoot to get that access”
The report said that during the first three months of the current financial year (April to June) a further sum of £87,288.42 had been raised in overpayments. But £283,987.63 had been recovered, reducing the debt by £196,699.21.
A benefit overpayment debt of £4,092.40 was deemed “irrecoverable” however.
Cabinet members were asked to approve the write-off of business rate arrears totalling £18,038.05 and council tax debts of £16,068.12 at Thursday’s meeting.
The report said: “Council tax due for the current year amounts to £81.6 million and we would anticipate collecting in the region of 98.4 per cent within the year, as was the case in the last financial year. Action continues to collect the remainder, after the end of the financial year, with over 99 per cent being recovered.
“By 30 June, we had collected 29.2 per cent of the year’s charges, which is broadly in line with the corresponding period of the previous year, which was 29.4 per cent. Prior year arrears of £5,387,871.52 existed at 1 April 2019, but had reduced by £389,041.29 to £4,998,803.33 by the end of June.
“Business rates due for the current year amount to £51.8 million of which some 26.2 per cent was collected by the end of the June. Again we would anticipate the collection rate to match last year’s performance of 98.4 per cent.
“Prior year arrears of £1,616,142.53 were outstanding at the beginning of April, and were reduced to £1,502,677.82 by 30 June – a reduction of £128,172.69.”
Councillor Carolyn Trowbridge, cabinet member for leisure, said: “I think the 99 per cent being recovered is absolutely excellent. I’m extremely pleased we have the officers we have got at this council.”
