Public Services Management: Public benefits from leaner and fitter agency

NEWSPAPER cuttings, enlarged and mounted for hanging, are propped against the wall in the fourth-floor office of Michael Bichard, chief executive of the Social Security Benefits Agency. One, under the headline 'Feeling the benefit', reads: 'Customers of the revamped benefits office in Gateshead do a double-take when they walk through the door. Some even think they have walked into the wrong office.' A second cutting is a positive story about another office, under the heading: 'Working for your benefit.'

Welcome drops of hard-won praise in an ocean of less flattering coverage? Michael Bichard is the first to admit that it gets to you when, in spite of substantial service improvements, there seems always to be a tide of adverse publicity. Hence the cuttings.

'As my office is rather drab,' says the man responsible for one of the Government's most overworked and underappreciated services, 'I am going to fill up the walls with some of the good news.'

Bichard has headed the Benefits Agency for three years, including overseeing its move out of London to Quarry House, Leeds. He manages the delivery of pounds 70bn in benefits each year to more than 20 million people, in an openly critical public and political arena.

'It can be depressing,' he confides, 'especially if you spend 12 months, as we just have, dealing with problems associated with the introduction of something like the Disability Living Allowance. Not only were very distressing individual cases coming across our desks every day, but we had to manage as best we could when faced with a hostile media. You have to keep reminding yourself that so much else is going well.

'You have to look at what has been improved. There will always be problems - but we have many tangible achievements to our credit.'

The introduction of DLA was a painful time, partly because claim forecasts for the first months were wide of the mark. The backlog by July 1992, when disabled people were frustrated and increasingly vocal, was 'quite unacceptable', the agency's conceded in its second annual report. It is to the agency's credit, Bichard said, that the problems were solved relatively quickly and that DLA claims are now dealt with much faster than had been planned.

The Benefits Agency was established as the largest of the government's Next Step Agencies in April 1991, and Michael Bichard was the man brought in to turn it into a model of commercial efficiency. He had been, at 33, among Britain's youngest-ever local authority chief executives at Brent, north London, following a spell as head of the chief executive's department at Lambeth, in south London, and was head-hunted for the agency in 1990 while chief executive of Gloucestershire County Council.

The Benefits Agency, with 70,000 staff and 474 offices, is one of the government's most- used departments. Both the pressure and workload are set to increase amid immediate political concerns over public sector spending and, long term, as Britain caters for an increasingly elderly population.

There are presently just under 10 million pensioners, with numbers forecast to rise by 250,000 every four years. Half the social security budget goes on the contributory state pension, eating up pounds 25bn this year and the cost is rising. There are 37 different benefits, and at some point every citizen comes in contact with the agency.

One of Bichard's first moves was to change how the organisation regards the public. 'I felt the term 'claimant' was pejorative,' he said, 'so we changed it to customer.' Improving customer service has become a central theme in a series of changes.

'Our research showed that customers were concerned about clearance time. We have reduced that by 30 per cent on all major benefits across the country. London was our worst performing area and we have cut it there by 50 per cent.'

Other measures have included refurbishing 100 offices. Some, he admits, were demeaning for customers. All front-line staff wear name badges, so that customers know who they are dealing with, particularly if they have a complaint. As it happens, a recent survey showed 85 per cent of customers are satisfied - no mean feat when expectations are rising and many, especially in the South-East, are people unaccustomed to seeking social security help.

He recognises that some long-standing shortcomings have yet to be put right but is vigorous in defence of staff.

'Not long ago a columnist wrote a piece describing our staff as 'slugs'. I was not going to let that go by. I have sent her a copy of a letter from a man recently made redundant. After dealing with a range of institutions, including banks, building societies and the agency, he reckons we are the best in terms of service and courtesy.'

He adds: 'It amuses me when people say that one or another of the chain stores 'would not have done it that way'. I would like to take 20 of their staff and swap them for 20 of ours. Ours deal with issues far more complex than those in retailing and with customers under much greater stress. The pressures are far greater. It doesn't happen every day, but people have walked into our offices and poured petrol over themselves. This has to be dealt with on top of everyday business and complaints.'

Even so, morale is a problem, partly because of the pace of change and the threat to job security from market testing. Nonetheless, Bichard believes most agency support services should be open to competition.

Despite the achievements there is still a long way to go. He is concerned about accuracy. 'People want to be paid quickly but they also want it done correctly. There is a long-standing accuracy problem which we have not yet cracked. Each year there are too many under or over-payments because of errors. We need to improve accuracy and the quality of our adjudication decisions.

'One way of preventing fraud, another continuing problem, is to bring together benefit information about each individual and to be able to deal with them in one place to check out their claims. 'One place, one person, one time' is our ultimate strategic objective.'

Within three years he would also like the agency to be sending out regular customer accounts of all transactions, a kind of benefits statement.

Another controversial proposal intended to help solve some of these problems was changing payment to credit transfer. He smiles ruefully, recalling how even suggesting the change enraged the Post Office, the media and MPs.

'Despite this there is no doubt that we could make vast savings and reduce the cost of fraud by encouraging more people to make use of it.'

Fraud, both organised and by individual claimants, is a big concern. 'Overall resourcing the fight against fraud costs us about pounds 70m a year. We recover pounds 500m in terms of halting false claims and claw back between pounds 40 and pounds 50m a year from organised fraud.

'Fraud is worrying because it undermines the integrity of the system and can finance other criminal activities. If you get a reputation as a soft target, criminals focus on it as an easy way of making money. That's why we are taking fraud and security more seriously than ever before. The new order book, the first redesign in 45 years, is one of many initiatives.'

Fraud is just one aspect of cost control and Bichard is acutely aware that many will judge the agency not just by service improvements but by the savings it achieves. Here, he believes, there is more good news. Productivity per member of staff has increased by more than 20 per cent since the agency was set up. Management overheads have been reduced by 25 per cent. Efficiency targets have been exceeded every year and, perhaps most impressively, the agency copes with the same workload as in 1990 with 15,000 fewer staff.

'We think we have a good track record in improving value for money to the taxpayer but we know that we have still more to do before we are truly competitive,' says Bichard.

He is convinced that the quality of service depends on the quality of staff and the extent to which they feel valued.

A great deal of effort has gone into giving staff greater involvement and better training and the agency has recently launched what is thought to be the biggest NVQ scheme in Britain, with 1,700 places in the first year alone.

For the 800 staff at headquarters, the past year has also seen them relocating from Whitehall to Leeds, a move which has not necessarily made it easier to stay close to ministers, despite high-tech video-conferencing facilities.

Bichard is now three years through a five-year contract. What will happen at the end?

'Who knows?' he says. 'But one thing I really want is for us to have gone so far down the road of customer service, improved delivery and efficiency that, whatever happens, it will be impossible to reverse.'

(Photograph omitted)