Jobcentre Plus Plaistow Misuse of Funds

The National Audit Office has today published its investigation into misuse of the Flexible Support Fund in Plaistow jobcentre. In November 2015, the Rt Hon. Stephen Timms MP contacted the NAO with concerns about misuse of the Fund in the East London jobcentre as well as concerns about pressures on its staff to falsely inflate performance measures. These concerns were prompted by two former jobcentre staff members who had been dismissed for misusing the Fund. They also raised concerns with the NAO about the Department for Work and Pensions’ response to these issues.

The NAO report covers:

• how the Department for Work & Pensions responded to allegations of misuse in Plaistow jobcentre;
• how the Department has managed the risk of more widespread abuse of the Fund; and
• how the Department has monitored wider incentives and pressures within jobcentres.

The NAO found:

• Following a customer complaint in August 2013, the Department dismissed two members of staff for misuse of the Fund in Plaistow jobcentre. After investigating, the Department concluded the staff members were involved in falsely awarding Fund payments to inflate off-flow, a measure of jobcentre performance. Five claimants were affected across the two cases. The Department dismissed both members of staff for gross misconduct in May 2014.

• The Department based its decisions on investigations into the actions of both dismissed members of staff. The members of staff raised concerns about the Department's approach. In particular they questioned whether investigators: followed correct procedures; fully considered evidence; and recognised mitigating circumstances. The Department's internal investigators spent an average of 94 hours on each of the two cases, compared with an average of 83 hours for all investigations that led to a dismissal in 2014-15.
• The dismissed members of staff raised concerns that misuse of the Fund was widespread and the Department had not investigated fully. They claimed that managers encouraged aggressive approaches to improve off-flow, including falsely signing claimants off benefits and using the Fund to cover gaps in benefit payments.

• An employment tribunal upheld the Department's decision when challenged by one of the dismissed members of staff. One of the two dismissed staff members took the Department to an employment tribunal alleging unfair dismissal. The judge in the case concluded in March 2015 that the dismissal was procedurally and substantively fair.
• The Department investigated several other staff members for misuse of the Fund. In total it investigated ten members of staff in Plaistow and found that six had contributed to the misuse of the Fund.
• Plaistow jobcentre staff have raised concerns about pressures in jobcentres during and since 2013. They raised concerns about staff capacity and pressures to improve off-flow. Some alleged that managers encouraged advisers to misuse the Fund to increase off-flow. The dismissed members of staff reported other practices including deliberately booking jobcentre appointments at inconvenient times of day to increase missed appointments and trigger sanctions.
• Following whistleblower concerns, the Department investigated allegations about Plaistow jobcentre managers putting pressure on staff to misuse the Fund. It conducted internal and human resources investigations into a number of allegations, including bullying and harassment. None resulted in disciplinary action.
• Missing documents meant the Department could not fully investigate all allegations. The jobcentre's finance officer who performed checks on Fund applications during part of 2013 told us about missing documents. The Department's investigators also noted that some documents were missing in one of its investigations. The investigation led to the Department taking disciplinary action. It is unknown what impact the missing documents would have had on the severity of that disciplinary action.
• The Department carried out an intelligence exercise looking at Fund payments in other jobcentres. The Department took a sample of 1,845 payments made by Plaistow and two other East London jobcentres in 2013-14. The exercise identified two further cases of misuse in Plaistow. No misuse was identified at the other jobcentres. There was no documented methodology for the exercise.
• The Department's internal audit team has highlighted limitations in the Department's control of Fund payments. The Department has introduced several changes aimed at strengthening control over payments.
• The Department’s investigations did not directly review wider cultural issues or pressures on staff in Plaistow. The Department believes its use of targets for off-flow is appropriate and that they create no significant perverse incentives. The Department's investigations concluded that the misuse of the Fund identified in Plaistow jobcentre was not widespread.

• The Flexible Support Fund allows jobcentre staff to make payments to benefit claimants to help reduce barriers to work.
• The report does not reconsider individual employment decisions and does not evaluate the original dismissal decisions or subsequent employment tribunal findings.
• The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. The Department studies evaluate the value for money of public spending, nationally and locally. Recommendations and reports on good practice help government improve public services, and their work led to audited savings of £1.21 billion in 2015.