By Richard Johnstone | 19 June 2014
The Audit Commission has called on councils to improve the quality of claims made for Whitehall grants or subsidies after finding one-third of all returns were qualified in 2012/13, including 78% of those for housing and council tax benefit.
In an examination of the claims made by local government to Whitehall to meet the costs of national benefits administered locally, the commission also said it was disappointing the trend had worsened since 2009/10.
According to the commission’s figures, auditors issued a qualification letter in around 35% of the 1,023 claims and returns made by councils for 2012/13 in respect of seven grant or subsidy schemes.
However, 255 of the 360 related to claims for housing and council tax benefit subsidy, with the overall proportion of these claims challenged standing at 78% in 2012/13.
The commission is tasked with certifying claims and returns made by local authorities for some Whitehall schemes to ensure claims comply with the relevant terms and conditions and are based on reliable information. Where auditors find errors or non-compliance with grant terms and conditions, they raise these issues with claimant councils. If a resolution can be found, the claim is amended as agreed. But if local negotiations fail, the Audit Commission’s appointed auditors advise the grant paying body, by letter, technically referred to as a qualification of dispute.
In total, the seven schemes examined transfer around £50.5bn of public money from central to local government. Although most claims made by councils for grants and subsidies for 2012/13 met the terms and conditions set by the grant paying body, adjustments worth £17.3m were made as a result of work done by the appointed auditors.
Controller of audit Marcine Waterman said: ‘It is particularly disappointing that, between 2009 and 2013, we have seen housing and council tax benefit subsidy claim qualifications increase from 60% to 78%.
‘It is a persistent problem, with half of the authorities we audit having their claims qualified every year for the past four years. The Department for Work and Pensions has recently written to authorities requiring action on past qualifications and it is important that this has impact. We will continue to work with the department to refine the approach to the work and to identify opportunities to reduce qualifications.’
The Department for Communities and Local Government and the Treasury are now working with grant-paying bodies to develop transitional arrangements to provide assurance for existing schemes when the commission closes next April.
It was important to ensure assurance over the billions of pounds of public money continued in some form, Waterman added, given the qualifications reported.
‘We have made sure that claims and returns are completed properly and have highlighted where the amounts claimed, or reported, were based on inaccurate information. Although only a small percentage of the billions of pounds involved, the amendments are still worth millions of pounds.’
However, the national system for Council Tax Benefit was abolished from April 2013, with the funding cut by 10% and localised to town halls to run their own local support scheme.
