Overpayments in housing and council tax benefit subsidy

At Audit Committee last week a number of reports were presented. Among their number was BDO: Grant Claims and Returns Certification Report for the Year ended 31 March 2013.

On page 5, under a section on Housing and council tax benefit subsidy is this:

Findings and impact on claim

The extrapolated errors all relate to over-claims of subsidy. If DWP decide to adjust for all of these extrapolated errors, then the total adjustment to the overpayments reported would be £236,921, resulting in a potential loss of subsidy of £716,043 because the Council would then breach the overpayments threshold within the scheme and therefore receive less subsidy. In total this represents a potential 0.6% reduction in subsidy.

This prompted me to ask some questions, and I summarise the responses here.

This loss in subsidy would be made up from reserves set aside for this purpose. These reserves could have been spent, as a one-off, on any other project of the council’s choosing. Since making no mistakes was considered impossible, the usual amount of error was quoted as around £200,000.

My interpretation then, is that the over-payments made in error are about half a million more than what is considered par for the course. That this will result in a draw down from reserves, reserves that could have been used in any special project, shows the real losers are Southend-on-Sea’s residents.

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