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Benefits (Overpayment)

Volume 453: debated on Monday 27 November 2006

3. What steps he is taking to reduce the level of debt owing to his Department arising from overpayment of benefits. (102898)

We began the debt recovery programme in 2001 to bring increased focus on to the management and recovery of debt. Centralised debt centres were in place by 2004. Earlier this year, the new IT system became fully operational. Recovery levels for this financial year are running significantly ahead of previous years.

Yes, but with overpayments now running at nearly £1 billion a year, half of them being the result of official error, can the Minister offer the House anything more encouraging than an error taskforce staffed by 12, 10 of whom are part-timers, possibly—I know not—overpaying benefits in the rest of their time? Can he undertake firmly to the House that after a long period of beginning to analyse the problem, we may now at last have action from Ministers on tackling the overhang of debt, which is well over £1 billion, and even more importantly, on tackling the complexities of the system at source to remove the source of the errors?

As I have said to the hon. Gentleman, we are already seeing in the current financial year an accelerating rate of debt recovery as a result of the improvements that we have already made. New debt comes on to the books at about £400 million a year. There are two things to do—to reduce the level of debt coming into the system and then to improve the rate of debt recovery—both of which are already being done. To correct the hon. Gentleman on something that he said, about three quarters of the debt that is currently due is down to customer error, not official error.

Looking at the issue from the other end of the telescope, what assessment has the Minister’s Department made of individuals getting into increased personal debt as a result of delays in processing benefit payments? Increasing numbers of constituents are coming to me in desperation over that problem.

Of course, it is important at all times that we process debt as rapidly as possible. Several changes have been made in the way of benefit simplification to help to achieve that. We continually simplify forms to make processing easier, and we do more data sharing between different parts of the Department to ensure that information does not have to be given to us on repeat occasions. All those changes are making it easier for our customers to engage with the benefits system.

Overpayment of housing benefit also affects landlords and tenants. Because of the ongoing inefficiency of Waveney district council, most landlords there feel that they are losing out by having benefit clawed back. They are so fed up that they have started to put up signs in their letting offices that say “No DSS tenants”. That means that people who need accommodation in that sector are unable to get it, because of the benefit shambles caused by the local authority’s administration.

As my hon. Friend knows, housing benefit is administered by about 400 different local authorities, and there is variable performance between them. However, he should also know that we have had investment running for a number of years that has worked with local authorities to improve their processing times. The results from that investment are extremely encouraging. Average processing times have reduced sharply and the authorities with the longest processing times have made the most improvement in reducing them. I reassure my hon. Friend that I keep an eye on all the performances of local authorities, and we are in regular touch with those that still do not perform sufficiently well.

Where overpayment results from official error, not that of the claimant, I put it to the Minister that recovery of the sum overpaid as a matter of great speed and urgency should not be the top priority; rather, the focus should be on justice, equity and consideration for the hapless victim of ministerial or departmental incompetence.

I am happy to tell the hon. Gentleman that it is. If he cares to examine the rules that relate to recovery, he will see that recovery of overpaid benefit is not the top priority in recovery from those who are on any form of benefit. Indeed, housing costs and debts to fuel payment must be recovered before any overpayment of benefit. A rule that we apply throughout the process of recovering debts to the benefits system is that we shall not do so in a way that inflicts hardship on any of our customers.