Benefits offices 'are a shambles'

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Westminster Correspondent

A privatisation contract to run part of the Benefits Agency has resulted in a shambles, with performance targets not being met and officials expressing doubts that it is yielding any savings at all, according to a management consultants' report prepared for the agency.

So bad have things become, says the report, a copy of which has been passed to the Independent, that "relationships between all parties are strained. There is a lack of goodwill and a lack of trust."

The report from In Depth Consulting focuses on the three-year contract to BET, the giant office services group - currently the subject of a pounds 1.9bn takeover bid from Rentokil - to run the back offices of the Benefits Agency in Lancashire and Cumbria.

BET's brief was to handle typing, open the mail, run the messenger service, ensure stationery supplies were up to demand and operate security for the agency's branches across the region, starting in January last year. The result, concludes the report, was a disaster.

In Blackpool, it says, the company did not provide adequate security cover. The security guard installed "persistently failed to intervene to prevent anti-social behaviour by [agency] customers," writes In Depth, adding that overall safety and security "is an area of concern".

Benefits Agency staff were also left without stationery and, last September, BET failed to meet 43 per cent of the targets set for opening post from claimants. This was caused by "under-resourcing on the part of the contractor" and, the report acknowledges, the mail-bag being greater than expected when the contract was awarded. Another disaster area was typing. In one district of the agency, staff who deal with claimants' appeals had not received any urgent typing for six days - despite a request for a 48-hour turnaround.

Again, writes In Depth, "BET under-resourcing appears to be a key factor. Typists are frequently taken to cover switchboard and post-opening duties ..."

Where problems arose, BET staff were reluctant to raise the issues with management "as they fear that this will rebound on them and be taken as an indication of their own inefficiency". What In Depth describes as "anecdotal information" suggests "BET quality assurance amounts to disciplinary action against the individual if a problem is raised". In one of the most telling phrases, BET's staff, says the report, "have feelings of frustration with BET equal to those of the customers".

To get around the shortcomings, agency staff are are taking matters into their own hands: ordering stationery direct, doing their own typing, and opening and sorting mail themselves. This is likely to defeat the object of contracting out and cast doubt over the value of the privatisation.

John Hutton, MP for Barrow and Furness, who obtained the In Depth report, said it revealed "the triumph of political dogma over common sense". It was obvious, he said, that the promised savings to the taxpayer from allowing BET to run the services were "just not materialising".

A BET spokesman said the report related to "start-up difficulties" which also reflected a greater volume of work than expected. Staff numbers, he said, had since been increased. "Inevitably," he added, "when a new supplier comes on site there is a lot of learning to be done."