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Bonkers Blog December 2015

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15 December (Part 2) - Bexley owed millions in Housing Benefit overpayments with little chance of reducing the debt

After the front door jobsworth had been persuaded to let me into the council chamber and I had grabbed the only copy of the Agenda made available for the public I sat down to be bombarded by facts from several of the council officers present at the Resources Scrutiny meeting. Those facts are not going to make the most exciting reading ever.
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Councillor Andy Dourmoush (Conservative, Longlands and pictured above right) who runs the successful Halal meat supplier, Eden Valley Group, in Erith had noticed that the business rates collection target had fallen behind target. The dip had been caused almost entirely by Bexley College which paid late and Thames Water which was no longer paying in advance, so the real differences were not especially serious.

Collection of council tax via Direct Debit had increased significantly this year, from 66% to 72·35%.

The biggest event by far, in terms of time taken anyway, was the Head of Exchequer Services’ report and question session on the reclaiming of overpaid Housing Benefit. He described the job as running not even to stand still and there is currently nearly £9 million of overpayment being chased in Bexley. The situation has been steadily deteriorating nationally and heading for £1·6 billion. Payments in Bexley are now at the £100 million a year mark; Bexley’s money but nearly all of it provided for the purpose by central government. Overpayments can only be recovered from each person at a rate capped at £11.10 pence a week except in the most exceptional circumstances.

Bexley’s overpayment amount has grown by more than £1.7 million since the DWP joined HMRC’s Real Time Information system which matches tax data and six social security benefits to identify under declared earnings and pension income.

It was felt that Housing Benefit no longer fitted modern work practices, zero hours contracts and part time work causes income to fluctuate rapidly and the benefits payments system can’t keep up.

Claimants are often unwilling to report changes in circumstances because they fear payments will stop while being recalculated to a possibly lower level. The changes to legislation made in 2004 were given as an aggravating factor. Annual reviews were outlawed.

The steep rises in rent, and with it the benefit, is pushing overpayments skywards too, but they are thought to be most often due to errors rather than fraud, but as the total sum owed is not subdivided nothing specific is known.

When cases have gone to Bexley Magistrates Court, £15,000 of fraud might result in 120 hours of community service. Planned Press Releases “had been pulled” because the punishment was not seen as sufficient deterrent. The former Director of Finance regarded it as an incentive to commit fraud. Mr. Mark Underwood must find it hard to get any satisfaction from doing his vital job. Several councillors thanked him for his comprehensive report. Well explained too if I might say so.


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