Executive Summary

National Audit Office Value for Money Report

1. The Department for Work and Pensions, including its agencies, aims to relieve poverty by helping people find work, provide assistance during sickness and disability, and help people to support their children and plan for retirement. It is a highly complex organisation with millions of customers and a wide range of responsibilities and relationships (Box 1).
   
   
   
   As part of the efforts to fulfil its aims, they administer around 40 benefits, allowances and grants to a wide and diverse population. Many of the benefits are linked together (Figures 1 and 2). The benefit system has evolved over time and the majority of the population will have some contact with it during their lifetime. Many of the Departments activities involve routine and repetitive transactions of the type where the Government sees potential for efficiency savings.
   
   Figure 1 ("Working age benefits diagram") is unavailable in this version of the executive summary.
   
   Figure 2 ("Benefit Linkages for the Over-50's") is unavailable in this version of the executive summary.
   
   Figure 3 ("Factors affecting customers experiences of complexity") is unavailable in this version of the executive summary.
   
   Figure 4 ("Benefit Linkages for the Over-50's") is unavailable in this version of the executive summary.
    
2. To meet the needs of people in a wide range of circumstances and enable the Department to pursue its policy objectives, benefit legislation and supporting regulations are inherently detailed. This also allows the Department to pursue the objective of equity and fairness between individuals in the same or differing situations. It is also to be able to provide incentives (for example, to encourage people to work) and rewards (for example, recognising savings in the design of Pension Credit), as well as meet specific needs through careful tailoring of the rules. Detailed rules also determine more clearly who is eligible for benefit and allow the Department to seek to achieve its aims in a cost effective manner. Thus, for example, certain benefits take account of individuals income and capital levels to allow the state to direct funds towards those most in need.
    
3. Many peoples dealings with the benefits system are uncomplicated and their needs and circumstances are straightforward. After initial contact, benefits or pensions may be paid without much further interaction with the Department, although customers must report changes of circumstances, and Jobseekers Allowance customers, for instance, are required to show they are actively seeking work. Nevertheless, for many others, the benefits system is seen as highly complex and problematic (Figure 3). The concept of the complexity of the benefits system has been a matter of long-standing concern to the Government, as well as the Committee of Public Accounts, the National Audit Office and others including the House of Commons Work and Pensions Select Committee. There is almost universal agreement that complexity exists and is perceived as a problem, and in the National Audit Offices opinion, it is perhaps one of the most important issues impacting on the performance of the Department. For the last 15 years, the Comptroller and Auditor General has given a qualified audit opinion on the accounts of the Department for Work and Pensions and previously, the Department of Social Security. In part, this is due to the extent of errors in the payment of benefits much of which is generated by the complexity of the system.
    
4. Complexity is not a new issue and the current benefits system is an accumulation of years of legislative change. Starting in the early 20th century, it has evolved, adjusting to changing social and economic circumstances and political orientations, as well as expanding to meet new needs. Successive Governments have advocated simplification, including in the Departments latest Five Year Strategy, published in 2005, which also recognised that this will not necessarily save money because, for example, in designing changes, the Department needs to avoid worsening the position of current customers. Nevertheless, simplification can have a range of potential benefits (Box 2). One of these is greater efficiency. This comes at a time when, following the 2004 Gershon Review, the Government is seeking to increase efficiency in administration more generally, which gives an added impetus to efforts to simplify transactions with the public.
   
   
   
5. Simplification is not an easy option. Radical reform is a rare, costly, time-consuming, and potentially controversial act. Even when such reform is agreed, the process from consultation through to changes in primary legislation may take several years. Thus, simplification requires consideration of trade offs, including between:
   
   
   • anticipated increased administrative efficiency (which may not be delivered) and savings and increased programme expenditure (which is more predictable);
      
   • a simple, non-intrusive application process and the need to avoid increased susceptibility to fraud;
      
   • the needs and rights of benefit customers and the wider responsibilities to other taxpayers and considerations about the impact on the economy; and
      
   • tailoring the system to meet a wide range of circumstances and the desirability of a relatively simple set of rules.
     
6. Against this background, we examined the issue of the complexity of the benefits system. To do this, we drew on the National Audit Offices accumulated experience as auditor of the benefits and worked with our partners RAND Europe to consider aspects of complexity in more detail (Appendix 1). The report focuses on benefits for which the Department for Work and Pensions is responsible. This includes its interfaces with other systems, especially tax credits administered by HM Revenue and Customs, which are an important aspect impacting on complexity and are referred to where appropriate. In doing our work, we recognise that much complexity is an inevitable consequence of trying to meet the varied needs of the population and of deliberate decisions by governments on priorities and choices.
   
   Key principles
   • Designing new benefits to deliberately reduce complexity
      
   • Systematically removing anomalies and deliberately realigning provisions
      
   • Simplifying customer input
      
   • Simplifying processes and rationalising requirements
      
   • Sharing information and avoiding duplication of effort
      
   • Using technology to protect customers from complexity
      
   • Making the most of external scrutiny mechanisms such as the Social Security Advisory Committee, the Departments Audit Committees and Regulatory Impact Assessments
      
7. Our examination does not question the right of Government to design the system to meet its desired objectives, but does stem from our belief that there is sizeable scope to reduce complexity for the benefit of customers and in the interests of greater efficiency. The report is designed to highlight the constraints on the Department and draw attention to the actions that have been taken (some of which are in Annex A to the Executive Summary) which help to illustrate more general principles for the future.
    
8. The report looks at:
   • the benefits system and its development (Part 1);
      
   • the causes of complexity (Part 2);
      
   • the effects of complexity (Part 3); and
      
   • what the Department has been doing to tackle problems linked to complexity (Part 4).

   What are the causes of complexity?
    

9. A dictionary definition of complexity is consisting of parts or elements not simply co-ordinated, but some of them involved in various degrees of subordination; complicated, involved, intricate; not easily analysed or disentangled. The benefits system fits this definition. It is hard to consider the benefit system as a whole because of its scale and yet the interaction of different parts makes it difficult to consider individual benefits in isolation. Thus, the complexity arises from a combination of the structural complexity of the system (the number of different, overlapping and interdependent benefits) and the complexity of individual benefits (much of which is deliberate as outlined below). More specifically, we have identified five aspects of complexity within the benefits system (1) relating to the way the system has been designed and (2) subsequently amended, (3) the complexity generated by how different layers in the organisation work together, (4) how different benefits and parts of the organisation interact with others and (5) by the way benefits are delivered (Figure 4).
   
   
    
10. A significant amount of the benefit system is complex in order to meet policy intent and to safeguard it against abuse. Much complexity is there as a deliberate consequence of the philosophies and objectives behind the benefits. This is as a result of successive governments seeking to develop a rule based system that is equitable and accessible and at the same time, safeguarding the system against abuse. Governments have also attempted to tailor regulations to the variety of human life in a population of 60 million people. This includes changing family income levels and structure, different residential arrangements, varying working hours and fluctuating states of health. The scale of change is also a factor. Between 2000 and 2004, there were six new Acts and 364 new statutory instruments affecting the law on social security. In addition, the incremental addition of regulations and their interaction with current ones can add to the complexity. Individually, they may make sense, but the cumulative effect can be to create overlaps and ultimately confusion for some.
     
11. Income-related benefits such as Income Support are complex because they involve detailed rules on entitlements, catering for a wide range of circumstances. The complexity of a benefit like Disability Living Allowance arises because it is necessary to assess what care and mobility needs an individual has as a result of an illness or disability. These needs are personal and vary considerably between individuals. This assessment requires a decision about eligibility, based on medical and other evidence, as well as taking account of legislation and emerging case law. Other elements add to the complexity of the system. For example, to ensure that customers are not disadvantaged during the implementation of changes, transitional protection may need to be built into the calculation of benefits. This requires staff to be aware of these additional rules and when or for what period they need to apply these exceptions to individual customers.
     
12. Incremental small scale changes can add to the complexity. Major reforms of benefits are relatively rare, but smaller scale, specific changes to rules are common. Such patchwork changes will inevitably give rise to adjustments in the rules governing eligibility, with a need to revise staff guidance and communicate these changes to customers. They may occur, for example, where there has been amendment to another benefit, which requires consequential changes; where case law forces a change to regulations; or where there are new priorities such as improving interactions with customers. Case law, derived from decisions by the judiciary and Social Security Commissioners [Footnote 1] , can change and usually widen the interpretation of legislation, particularly where terminology in regulations is open to different interpretations.
     
13. The way some benefits link up with each other or other forms of assistance also adds to the complexity. Horizontal interactions between benefits include passporting (where receipt of one benefit automatically leads to eligibility for another award), premiums (where receipt of one benefit automatically makes a customer eligible for a higher rate of another); and income interactions, where income from one benefit can be taken into account when calculating entitlement for another. The interaction between the benefits and tax credit systems and the organisations administering them, and links with the system for providing child maintenance through the Child Support Agency, add further complexity. For example, people need to report a change of circumstance at different times and to separate organisations for tax credits and Housing Benefit/Council Tax Benefit.
     
14. Complexity can increase as legislation is delegated for implementation at local level. Vertical interfaces occur going down the management chain. For example, local level staff are provided with detailed practical guidance in order to help them to interpret high level regulations, expressed in legal language. When responsibility for administration is delegated to a network of local operational sites, for example in the case of the Social Fund, complexity can arise due to different local offices interpreting guidance and administering the benefits in different ways, even when this happens for good reasons. For example, different housing markets may lead to diversity in the decisions made by the Rent Officer, and therefore different local outcomes for some Housing Benefit customers. The overall result can be differences, which adds to complexity.
     
15. Complexity in the delivery of benefits can arise as a consequence of the complex nature of the benefits themselves. Complex benefits can generate increased problems for benefit administration. For example, the forms to be filled out can be detailed and require much personal information and may not be well organised. [Footnote 2] The complexity of benefit administration is increased in some instances by organisational problems within the Department for instance, the current parallel running of separate systems for child support. As a result, the workarounds introduced mean that staff must access IT systems separately to gather information and undertake assessments manually. This generates duplication and increases the risk of error.
    
    The effects of complexity
    
    
16. Complexity can lead to administrative errors by both staff and customers and may facilitate fraud. Complexity affects the experience of those administering and claiming benefits in a variety of ways (Figure 5), although it is important not to assume that all problems with the benefit system relate to its complexity, or to allow complexity to be used as an excuse for poor performance which may occur for other reasons. Payment errors may also arise, for example, because of failures in training or problems relating to inefficient IT, rather than the benefit system.
    
                              
     
17. The processing of benefits requires the collection of evidence, interpretation of facts, application of rules and use of judgment. Errors can be generated by both staff and customers, at least in part because of complexity. For example, staff may not take into account all the facts relevant to a claim; one of the most common cases is overlooking eligibility for severe disability premium in Income Support. Errors by customers and staff can result in inaccurate benefit payments, which can be either an under or over provision of entitlement. Customers may misunderstand rules on evidence requirements or provide inaccurate information. Detailed rules on reporting changes of circumstance lead to some customers being unaware of when to provide updated information. On these occasions, the Department considers there is no evidence of intent. Complex regulations may also make the system vulnerable to deliberate action by customers to falsify their circumstances or deliberately fail to report changes accurately or on time. In these cases, the Department categorises the customers intent as fraud. In 2004-05, the Department estimated that this amounted to around 900 million. There is no evidence to establish to what extent this was due to the complex system.
     
18. In complex environments, official decisions are vulnerable to challenge and appeals linked with the uncertainty and misunderstandings may result. Around 20,000 cases a month around 1 per cent of all decisions go to appeal. [Footnote 3] This is especially, but not exclusively, true with benefits requiring medical assessments, where the eligibility requirements cannot always be precise. Currently, around one-fifth of benefit decisions contain errors of some kind, and in benefits such as Disability Living Allowance and Attendance Allowance, the figure is around half. Many errors do not lead to inaccurate payments but they do reflect the complex process of gathering evidence, interpreting the law and asking the correct questions.
     
19. The quality of service provided to customers can be undermined by the difficulties presented by complexity. The many conditions and rules attached to specific benefits are not well understood by customers and many would prefer a simpler, less changeable system where they did not need to know about the many conditions and rules attached to specific benefits. Many find claim forms too long and have difficulties gathering together evidence. This is particularly the case for those with mental health problems or those who do not have English as a first language, although the Department has a number of measures in place to provide assistance such as the Language Line a service provided by Jobcentre Plus to assist in the translation of departmental information for people for whom English is not their first language. Nevertheless, the contacts made for assistance on benefits issues with organizations such as Citizens Advice (over 1.3 million cases in 2003‑04, representing about four per cent of benefit recipients) show the scale of the need for help to navigate the system.
     
20. Complexity may impact on the achievement of government policy objectives. There is evidence of a lack of understanding of benefits and a lack of desire to acquire it. For example, some customers particularly pensioners do not take up all the benefits to which they are entitled, and the complexity of the system has been identified as an important barrier to claiming. There is also a growing appreciation that a combination of the complexity of the benefit system and complexity in legislation covering private pension provision has deterred saving for retirement. According to the Pension Commission, the UK has a highly complex state and private pension system, and under half of people surveyed claimed to have a good or reasonable understanding of it. Box 3 illustrates cases of customers struggling with the system.
     
21. Complexity makes things harder for staff. Complexity impacts on the performance of staff who administer benefits because of the need to keep up with changing regulations and guidance, and the difficulty of giving out information with confidence. The number of conditions associated with each benefit means that few individuals can have a detailed knowledge of a range of benefits. There are, for instance, 24 files of guidance on Jobseekers Allowance alone and 14 volumes for Income Support. The need to convey complex messages makes it harder for the Department to communicate in a straightforward manner with its customers in writing or orally (Box 3). Departmental research also suggests that the complex system can be a deterrent to staff volunteering information to customers, with advisers feeling the need to be vague, fearing the risk of misdirecting or confusing them. In extreme circumstances, where customers believe they have been misled, the Ombudsman has taken up their cases.
    
    
     
22. Complexity adds to the cost of administration. The greater the number of steps involved in reaching decisions, calculating payments, and the wider the range of evidence to gather and take into account, the greater the cost of administration is likely to be. Costs vary considerably; for example, the Department calculates that processing a new Income Support claim is around 61 compared with a Crisis Loan from the Social Fund at around 16. The administrative costs of complexity include the cost of correcting errors made by staff and customers, continuous staff training, supervision and management checking. The full cost is hard to measure, however, and in some cases, the costs are hidden, for example, the additional training costs to help staff deal with their specific training needs on particular issues. Other costs are exported, for example, those incurred by voluntary bodies giving advice on the completion of forms.
     
23. Complexity places heavy demands on IT. The Department has 35 major IT systems and is currently undergoing one of the largest modernisation programmes in Europe after a period of limited investment in making linkages between systems. This has affected its ability to help staff cope with the complex system. IT modernisation is constrained by complexity, with solutions made harder in some cases by a lack of compatibility between different systems. Complex policy requirements take longer to develop workable solutions, increase the likelihood of problems and failure, and ultimately require more investment. Attempts to simplify policy are limited by the desire to meet a wide range of circumstances. IT providers have expressed concerns that solutions are not always considered as part of policy development; last minute policy changes can affect technical design and even simple IT systems can be complicated by the need to cater for exceptions. However, the Department advised us that the infrastructure is being put in place to enable existing systems to be replaced with new, accessible technology which would help staff make more common connections and allow eligibility and award recommendations to be made for more complex cases.
    
    What has the Department done to deal with complexity?
     
24. In its Five Year Strategy, published in early 2005, the Department stated that Tackling complexity would make the benefits system easier for our customers to understand and access. We are actively considering the possibilities for future benefit simplification which could substantially cut the large sums both overpaid and underpaid because of mistakes and misunderstandings. However, this is not an easy option and simplification may not be possible or desirable for a number of reasons (Box 4). For example, some measures such as Job Grant and Housing Benefit run-ons (which could be argued to increase complexity) were introduced to create incentives for customers.
    
    
     
25. Simplification of regulations will not necessarily save money; administrative costs may be saved but programme expenditure could easily outweigh this many times over. For example, a problematic area of Income Support and Jobseekers Allowance is the failure to disclose living together as husband and wife which was estimated to cost around 190 million. One way to simplify the rule would be to increase the allowance for couples to twice the allowance for single people. However, the Department estimated this would increase benefit payments by around 2.2 billion in Income Support and Jobseekers Allowance in 2003-04 and might have a detrimental effect on work incentives for customers. Nevertheless, although there are good reasons for complex regulations, the Department has taken a number of steps to try to tackle complexity (Box 5).
    
    
     
26. The Department has introduced major reforms to some entitlements. In recent years, some major structural reforms to the benefits system (with the objective of simplification) have been introduced or proposed, including changes to Housing Benefit, Child Support and the guarantee element of Pension Credit (which is less complex in many ways than its predecessor, Minimum Income Guarantee). In each of these cases, significant performance problems had been identified which made proposed simplification worth investing in. In the case of Pension Credit, there were concerns that low take up of benefits amongst many pensioners was undermining the Governments anti-poverty objectives. With Child Support and Housing Benefit, the complex rules were widely seen as one of the main factors leading to a poor or inconsistent administrative performance. Common themes of reform have been deliberate reduction in evidence gathering requirements, attempts to reduce the number of calculations involved and greater transparency of outcome for customers.
     
27. The Department has made regular minor changes to certain benefits to improve their delivery. Major design reforms are not in some areas necessary, desirable or possible, but the Department has taken regular opportunities to achieve piecemeal improvements of the benefit administration. In Housing Benefit, for example, this is seen as a key part of on-going reform and measures have been included in recent Budget and Pre-Budget reports. There has also been a conscious desire to chip away at the income test by making it less complex and intrusive. This removed the requirement for recipients to renew their claim every 6-12 months, ending a time consuming element of work which was unpopular with customers. Elsewhere, amendments have been made to simplify aspects of the Social Fund and routine changes to Income Support legislation are made twice yearly.
     
28. The Department has achieved improvements in the ways in which some benefits impact on each other and on other forms of assistance. The Department has acted in a number of instances to manage better the complexities in the vertical chain of management from central authorities through regional and district offices, to front-line staff, as well as with local level partners such as local authorities and other partners. Housing Benefit has been particularly active in this regard. For example, local authorities use The Pension Services information when processing an individuals Housing Benefit claim. The introduction and roll-out of Remote Access Terminals has also provided local authorities with improved access to benefit information held by the Department. Through these terminals, local authority staff administering Housing Benefit and Council Tax Benefit can link into the departmental mainframe systems and obtain specified, relevant benefit data. In addition, The Pension Service has begun to develop Joint Teams, in which its officials work with staff from local authorities and voluntary bodies to gather data from individual pensioners to identify their potential for benefit. Another initiative being piloted is the development of a standard operating model for processing of new claims for certain benefits within Jobcentre Plus.
     
29. Efforts have been made to improve the delivery of benefits to customers but communicating information to them remains a problem. An alternative to simplification of benefits regulations or the administrative system is to seek to manage complexity so that it does not adversely affect the customer. There have been a wide variety of such initiatives, including practical developments such as shorter forms (for example, for Jobseekers Allowance (in 2002), Attendance Allowance (in 2003) and Pension Credit (in 2003)), the development of more than 70 contact centres and the greater use of telephony through which the Department hopes to be able to protect customers from the complexity of the system or guide them through it.
     
30. The Departments plans to centralise benefit processing and use contact centres for more straightforward interactions are central to its programme to meet its target of 960 million annual efficiency gains by 2007-08. These provide an opportunity for greater consistency in processes and the treatment of customers, as well as concentrating face-to-face help on those who need it.
     
31. Other initiatives have tried to make interaction with customers easier. Rapid Reclaim was introduced in 2001 for Income Support and Jobseekers Allowance and in Housing Benefit and Council Tax Benefit in October 2002. This is designed to streamline the reclaim process for those customers who return to the same benefit within 12 weeks of entitlement ceasing, where there have been no major changes of circumstance. Face to face contact is often required, and Jobcentre Plus provides direct advice through financial assessors, whilst some 10,000 personal advisers provide assistance to help people find work or improve their skills. The Pension Service has developed a local service for targeted assistance of those pensioners who require face‑to‑face contact. These contacts face to face and over the telephone require that staff have thorough training to ensure accurate and complete information is given and the necessary evidence is gathered.
     
32. The need to convey often complex information is a constant challenge for the Department. On the one hand, there is a duty to ensure that information provided is complete and accurate but on the other, it is essential that details are concise and accessible to people with a range of educational attainment. Some parts of the Department are simplifying their approach to the information they provide to the public. During 2005, Jobcentre Plus is introducing a new set of leaflets based around a set of customer focused guides for specific groups such as lone parents or school and college leavers. The intention is that information sheets will then supplement the guide and provide more detail. The Pension Services Pensioners Guide, issued originally in 2002, consolidates information about pensioners entitlements in one guide which explains the linkages between benefits. The Department is reviewing the branding of its products, services and constituent businesses but there remains a confusing array of products and services (more than 230 leaflets) and terminology used inevitably remains complex.
     
33. There is some external monitoring of the complexity of regulations and the Department has begun its own internal review of the scope for simplification. Social security legislation has a tendency to grow in complexity in response to the forces highlighted in paragraphs 9 to 11. This highlights the importance of mechanisms to identify, scrutinise and provide independent advice about proposed developments, and where appropriate, to counter it. The Social Security Advisory Committee acts as one such external monitor, providing advice to the Secretary of State on social security issues generally, and considering and reporting on specific proposals for regulations referred to it by the Department. The Secretary of State is obliged to publish the Committees reports and respond to its recommendations. At the same time, internal controls operate within the Department, where there is on-going strategic consideration of the future development of the benefit system, and small step by step changes are being taken to simplify specific benefits, for example in Housing Benefit and in the pensions area.
    
      Strategy for further tackling complexity
    
34. The Department of today has to live with decisions taken about benefits in the past. Overall, the Department has made some progress in tackling the complexity of the system and in designing ways of managing it to protect staff and customers, but it recognises that there is considerably more to be done. There are a number of lessons to be learned from recent developments. In particular:
    
    • simplification cannot be seen in isolation from pursuing wider policy objectives. It would not be possible or desirable if it undermined departmental aims such as helping people into work or reducing poverty;
       
    • simplification of rules does not necessarily lead immediately to a successful policy outcome and does not necessarily go hand in hand with simpler IT, as the current problems with the Child Support Agency show with the need for the handling of many exceptions;
       
    • simplification is not necessarily a way of saving money, although some simplifying measures such as payment modernisation streamline processes, thus releasing savings or resources to be redeployed on other priorities;
       
    • some initiatives can include both simplification and added complexity many aspects of Pension Credit such as the assessed income period have been welcomed, but the design of the savings credit increases the complexity of the system as a whole; and
       
    • administrative shortcomings and pressures on the organisation (such as job reductions, the extensive business change programme and the need to make efficiencies) mean departmental performance is more vulnerable than it might be to the negative effects of complexity. At the same time organisational and process improvements such as the centralisation of benefit processing, standard operating models and increased use of telephony should be helpful for both staff and customers in coping with complexity.
    • the additional work required to detect and address fraud and error, estimated at 2.6 billion in 2004‑05, and measure progress in reducing it. The National Audit Office is undertaking work with the Department in response to the Public Accounts Committee recommendation in their 4th Report of 2005-06 to establish how this compares with social security authorities and major private sector financial institutions in the United Kingdom and abroad, and what levels of fraud and error are to be expected in an organisation of this size;
       
    • the re-work required to recover overpayments, deal with customer contacts generated by delays and misunderstandings, and manage the appeals process;
       
    • the degree of customer support required, illustrated for example, by the numbers of people seeking assistance on benefit issues from advisory bodies; and
       
    • the adverse effects of complexity on some key policy objectives such as tackling poverty.
       
35. Dealing with the problems associated with complexity is a long term project which will require a systematic and strategic approach focusing on the system as a whole. We recognise that a number of steps have already been taken (Annex A ). It is not for the National Audit Office to determine which regulations should be removed. Instead, we encourage the Department to develop a strategy for short and long term tackling of the problem of complexity.
    
    In the short term:
     
    1. Complexity impacts on all aspects of the Departments business and must, therefore, be treated as an influence on most of its major business risks. There should be regular monitoring and reporting of progress in dealing with the problems associated with complexity. It is for ministers to decide policy but it should be done in full consideration of the impact of any major new development on the complexity of the whole system. To maintain attention on the issue, the Department should record in its Annual Report improvements made to the system during the reporting year.
        
    2. Allied to this, there should be a recognition across the Department of the importance of chipping away at regulations as part of its wider efficiency agenda work. Given the pressures on the system to become more, rather than less, complex, there should be an on-going department-wide commitment to exploit opportunities to cut away complex regulations. This might include removing formerly useful definitions as they become obsolete, as well as ensuring that the scope for simplification is always considered when major benefit reform is discussed. The Department will need to prioritise its programme of action for cost and time reasons.
        
    3. Clear communication with customers (and the wider population since many rely on information from friends and family) is essential to overcome lack of understanding of the benefit system and requires greater consistency in the terminology used in departmental literature. The Department has made efforts to produce clearer consolidated information material such as the Pensioners Guide, whilst Jobcentre Plus will start to issue a new set of client focused leaflets in 2005, and the Department carried out a review of its branding to overcome a lack of corporate identity which makes its key products difficult to identify. The Department should continue to improve its literature through ongoing reviews and rationalisation as part of a wider review of all channels of communication including award letters and correspondence to ensure they remain suitable for customers.
        
    4. There are few barriers to the benefit system as a whole becoming more complex and those there are could be used more effectively. In particular:
        
       • The external challenge role of the Social Security Advisory Committee provides a valuable check on complexity, drawing on the wide ranging expertise of its independent members. We encourage the Committee to include in its annual report a regular commentary on the complexity of the system based on its work during the year.
          
       • In view of the implications of complexity for financial control and the impact on fraud and error, we also encourage the Audit Committees of the Department and its agencies to consider the issue of complexity on a regular basis.
          
       • The Department should also take full advantage of the Regulatory Impact Assessment procedure which helps to ensure that legislation is fair and effective, necessary, meets the principles of better regulation and imposes the minimum burden. Since it is Parliament that scrutinises and approves the legislation, the Department should ensure that the Regulatory Impact Assessment communicates effectively to Parliament the benefits, costs and risks of its preferred option.
          
    5. Investment in staff training is essential to limit the consequences of complex systems: Many staff struggle to keep up with the complexity of the system and there is growing evidence that this affects their ability to advise on benefits and the links with tax credits. However, the new, more proactive approach to dealing with customers via financial assessors, personal advisers and contact centre staff underlines the importance of high quality training for all these staff so they can deal effectively with customer queries across benefits. This is particularly important for those who have face to face dealings with the hardest to help, as well as those who are responsible for gathering basic customer information on which the system relies. Certain roles offer scope for professionalisation. A valuable example of how this could be done is demonstrated by the proposed introduction of an accreditation system for Disability and Carers Service decision-makers.
        
    6. Reducing the complexity of the administration of the system offers perhaps the greatest scope for reform. Harmonisation of administrative rules and procedures would be a significant step forward and make the system easier to explain to customers. Benefit regulations currently include different administrative procedures for similar aspects of the regulations. Harmonisation of these procedures and rules would make it easier for both administrative staff and customers to understand and apply the rules. Currently, for example, there are different expectations for reporting changes of circumstance and applying for benefits, depending on which benefit is being paid. Efforts in this area would fit with the Departments current plans to achieve greater efficiency and standardisation of processes, for example, through the introduction of Benefit Processing Centres.
       
       Longer term, we consider:
       
    7. To avoid complexity at the interface between the tax credit and benefit systems, the Department should work with HM Revenue and Customs towards greater clarity for customers and more streamlined procedures where possible. Areas to explore in this respect might include common guidance, application forms and application timetables where appropriate, common terminology, IT, overpayment recovery, write-off criteria and fraud and prosecution arrangements.
        
    8. New technology remains a crucial element in the handling of a complex benefit system. Improved, easily accessible technology will help release the Department from dependence on detailed knowledge of complex benefits amongst staff and allow for efficient handling of routine cases. The Departments IT strategy is to support staff and customers in being able to navigate more easily through complex benefits rules and regulations. For example, the new Customer Information System provides staff with single, accurate views of key information for all customers. It will form one of the biggest databases in Europe. The first two phases have been successfully released. Improvements in the use of new technology, including legislative rule-based technology and decision‑making support, could release resources for value added activities and reduce the need for some training costs.
        
    9. The Department has to live within its budget and contribute to the Governments efficiency drive. In considering where to take simplification measures, the Department should take a wide view of the benefits to be gained by itself and its customers. In considering the cost-effectiveness of specific simplification measures, the Department should take a broad view of direct and indirect savings and impacts which may be achieved, bearing in mind the benefits of clarity and practical implementation, both for itself and its customers. This will require assumptions to be made about improvements in efficiency and delivery, quality improvements, reductions in fraud and error, as well as how greater compliance might result from improvements in the general publics perception of the social security system.

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    1.  [back from footnote 1] Social Security and Child Support Commissioners are special judges appointed by the Queen. They decide appeals on points of law from Appeals Service tribunals in cases relating to social security, tax credits, child support, housing benefit and council tax benefit.
        
    2.  [back from footnote 2] NAO (2003): Difficult Forms, HC 1145, 2002-03.
        
    3.  [back from footnote 3] NAO report Getting it right, putting it right: improving decision-making and appeals in social security benefits (HC1142 2002-03).