Build Financial Resilience with Civica's Revenue & Benefits Solutions

Revenues and benefits at a crossroads

Tracy Lewis, strategic account director – local government, Civica

Revenues and benefits teams find themselves at the heart of a system in flux. But with change also comes opportunities. Here we take a look at how the sector is uniquely positioned to leverage this moment and take a lead in transforming financial resilience in local government.

From the rollout of Universal Credit and the overhaul of Housing Benefit thresholds to the introduction of the Local Audit Office and the push for devolution and unitarisation, the current pace and scale of change is unprecedented.

One common factor across these sweeping reforms is the operational impact they will have on how local authorities administer benefits and collect revenues – to some it may feel like an operational earthquake!

Authorities will need to reimagine established processes, collaborate across boundaries and functions, and upskill in digital and data maturity, all while maintaining citizen services and fulfilling compliance obligations.

This is going to take time and investment, of course, but rather than view it as another strain on already stretched resources, what would things look like if it was instead positioned as a strategic opportunity to redefine the role of revenues and benefits?

The key to financial resilience in local government

Council tax and business rate collections represent the most important source of income for councils, while benefits allocation is an essential mechanism for delivering citizen welfare. These are the types of tools that should underpin and define local government more than any other.

However, there remains a concerning imbalance in funding versus the rising demands for services, especially in social care, while structurally there are questions hanging over how effective these two revenue streams are in today’s economy. Nevertheless, councils know not to hold out for the calvary to come and overhaul or rebuild these systems. Revenues and benefits teams are left to make the best out of what they have to work with. They do so, however, with a skillset that already has a lot of experience in managing change over the last 20 years.

As such, revenues and benefits should not just be a back-office function, it is a frontline service capable of delivering social equity and building trust among citizens through its effective financial management of the public purse.

These government reforms are now pushing revenues and benefits functions to bring new refinement in the way that budgeting and expenditure is managed at a local level.

What if this marked a watershed moment where revenues and benefits specialists moved from being responsive service providers to become forward-thinking architects of financial resilience?

The challenges of reform

As welfare reforms move forward, there is a lot of work and adapting needed to get things in order.

We are in the final stages of managed migration to Universal Credit, which will phase out legacy benefits including Job Seekers Allowance and tax credits. Ultimately, the system will be simplified, but that’s only once the transition has been fully made.

Councils must now manage daily updates from the DWP’s Universal Credit Data Share (UCDS) system to ensure accurate Council Tax Support and Housing Benefit assessments, and this requires additional policies on data handling.

At the same time, local authorities have been challenged to get tighter on delivering benefits assessments to bring claimant details up to date, unlock more funding and deliver greater value to constituents. Housing Benefit reform will require annual recalibration of Local Housing Allowance rates, for example, meaning that councils will need to frequently update entitlement calculations and communicate any changes to claimants.

On top of changes to meet new policies and thresholds, greater pressure is being applied to compliance, an area in which The Local Government Association has warned that ‘local audit is in crisis’.

In a separate review of local government financial sustainability, Gareth Davies, head of the National Audit Office (NAO), highlighted the unsustainability of short-term fixes. He said: “There have been repeated delays to local government finance reform and government can no longer resort to short-term solutions to support local authorities.”

Part of a more forward-facing solution comes with the creation of the Local Audit Office to oversee a coordinated audit system and standardise practices. This will act to raise the bar on local authority financial accounting and reporting systems, simplifying where possible.

It will also mean that revenues and benefits teams will face tighter audit oversight, especially around subsidy claims, fraud prevention and data accuracy, and in the way benefits payments, overpayments and recoveries are recorded.

The largest shift, however, will be through devolution and local government reorganisation (LGR). Many Council Tax Support schemes and Housing Benefit policies will need to be harmonised and merged as authorities combine, but there is also the harmonisation of IT systems and workforce that needs to be managed carefully to avoid service disruption, maintain institutional knowledge and set up for long term success.

There is certainly a lot going on. However, rather than just reactively implementing all of these reforms, what should revenue and benefits teams be doing now to take control and own the role of delivering financial resilience for their authority?

Find out how Civica can help guide your Revenue and Benefits function through reform and towards building long-term financial resilience.

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