When circular S11/2011 was issued RBV (Risk Based Verification) had already been around a couple of years following lengthy testing and pilot phases. A decade on and with Universal Credit roll out gathering pace is RBV still relevant?
Universal Credit (UC) is here, later than planned and not as universal as perhaps it was intended but it is here. Roll out has been painfully slow, beset by problems and dogged by bad publicity. It was never intended for Pensioners but now other claimants, like those in receipt of other common benefits won’t receive it either. Even working age claimants claiming UC but in temporary or supported accommodation will have to continue claiming Housing Benefit (HB) via their council. In its diluted form the impact on Councils’ caseloads and HB on-flows cannot be as pronounced as first predicted.
Another significant change has been the abolition of Council Tax Benefit and its replacement with Local Council Tax Support schemes (LCTS). Aside from giving councils the freedom to create their own eligibility and entitlement criteria, its biggest impact has been on local authority finances as councils now being faced with covering the cost of their schemes from the tax base. It’s fair to say that schemes have generally become less generous since their introduction in an effort to save money, which will have had a small impact on caseloads as some taxpayers are pushed out of entitlement but it will surely have increased the potential for fraud. Significantly though evidence shows that collection rates have suffered as a consequence. https://www.independent.co.uk/news/business/news/council-tax-benefit-austerity-unpaid-bills-institute-for-fiscal-studies-false-economy-a8750616.html
What’s the impact on councils?
Considering these two changes together what is the overall impact on councils? Caseloads will be smaller but how much smaller? All pensioners and a larger than expected proportion of working age Housing Benefit claims remain with councils along with all LCTS claims. As before HB and LCTS are processed together but as separate claim parts. Therefore, in reality only UC claims with a housing cost element that don’t have an LCTS claim part will be missing from the caseload. The council will still have to process an LCTS claim for any UC claims with a Council Tax liability if the claimant wants to claim a reduction.
Even with UC roll out gathering pace, from April 2017 to October 2018 we have seen only around an 8% reduction in the volume of requests for an RBV risk score from councils using our RBV services. This is very different to the decimated caseloads that were predicted and which some councils may have banked on to enable further cost reductions.
Of course, RBV is equally applicable and valuable to both HB and LCTS. It’s worth noting that the likelihood of a verification error on an LCTS claim is the same as it is for HB and the likelihood of a verification error for a pensioner is actually pretty much the same as it is for a working age claimant, that’s been consistent throughout our regular remodelling exercises. These facts mean that RBV continues to be just as relevant to the retained caseload as it ever was.
The importance of safeguarding the gateway to benefits, be it HB, LCTS or UC for that matter hasn’t changed although we could now argue that it’s more important to councils for LCTS claims because of the way schemes are funded. The average scheme in England costs £10.6m and reduces the tax base by 8,200 properties so there’s a lot at stake. The requirement for councils to make savings, protect revenues and guard against fraud and error certainly hasn’t changed. We believe that RBV remains as relevant and valuable to councils today as it was when it was first developed and to abandon it now will result in higher processing costs and expose councils to increased risks of fraud and error.
What the performance data tells us?
Looking at the reduction in HB caseload in isolation doesn’t give a true reflection of the resource requirement from officers because more often than not there is still an LCTS claim to process. The relatively small reduction in risk scores delivered through UC roll out supports this.
Performance data from 2017/18 showed that the overwhelming majority of RBV customers achieved faster processing times than the national average and verification error detection amongst RBV customers exceeded the national average by 33%. RBV remains an effective tool as these performance figures and associated efficiencies testify. With the way LCTS is financed perhaps for Councils at least the importance has shifted from Housing Benefit to Council Tax revenue protection and with this in mind here at Xantura we’re working to deliver even better outcomes for Councils in the future.