Callcredit Blog

What’s the right FERIS strategy for your council?

Business Efficiency

Back in August I wrote about a possible renaissance for interventions in the wake of the latest fraud & error figures in Housing Benefit (HB). The monetary value of HB fraud & error is rising, and estimates for 2013/14 show a loss of £1.45bn. ‘Claimant error’ unsurprisingly is the largest part of this figure with a whopping 38% increase from £650 million in 2011/12 to an estimated value of £900 million in 2013/14. Since my last blog we’ve been waiting to see what the DWP’s next move would be and now the waiting is over. In an effort to engage local authorities in a concerted effort to reduce Housing Benefit fraud & error the DWP has announced the Fraud and Error Reduction Incentive Scheme (FERIS).

Simply put, FERIS offers local authorities increased administration grant payments in return for identifying more reductions in HB entitlement. Without getting bogged down in the detail of setting performance baselines and lower and upper thresholds, which are all adequately explained in the circular, the objective is clear: identifying more changes of circumstances which result in a reduction in entitlement could earn your council money. Councils do have to opt in to the scheme though and in doing so will receive start-up funding to cover initial costs of putting plans and resources in place. Councils can also apply for additional bid funding to help deliver new and innovative ideas. The DWP isn’t specific on how these reductions are identified only that they are and so councils have a free rein to use whatever mechanisms they see fit. It seems that the DWP is happy for councils to explore new mechanisms outside of the traditional interventions of old.

Ultimately, encouraging claimants to report changes so removing the need to intervene is the ideal solution so well aimed publicity campaigns should be included in the council’s armoury. Councils may choose to embark on the well-trodden path of traditional paper based interventions or look at eclaims or telephone interventions to help reduce the resource and cost implications of customer interactions. Beyond that, what other options for a more efficient and cost effective FERIS strategy are there? Credit data is a rich source of information and is already widely used across local government to check information in areas like single person discount reviews and tenancy fraud. Accessing Callcredit’s data to look for significant changes in circumstances is a natural step to take and consistent with the use of credit data in risk based verification which has proven so successful.

Whatever method of customer interaction, intelligent and efficient targeting is essential after all, a costly intervention with no reward is money wasted. For maximum efficiency targeting must include three key ingredients. Firstly risk. Understanding which claims in the caseload have the greatest likelihood of experiencing a change is crucial. Secondly, what sort of change? Finding increases in benefit although laudable and beneficial for the claimant is not going to help you reach your FERIS threshold so you must target reductions. And thirdly, size is important.  Targeting large reductions will help you reach your threshold as quickly and efficiently as possible.

Do you have a solution that can target the right claims and access the power of credit data? We do.

Author: James Rawlins

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