Severe criticism has been levelled at Hackney Council's housing benefits outsourcer ITNet in a new report. A backlog of £3m prompted an examination of the contract.
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The preliminary findings of the report, commissioned by the council and housing associations, said that ITNet failed to deliver anything close to the agreed contractual performance output.
However, the report added that if ITNet - which is being paid £70m over seven years, recruits qualified and experienced staff to improve performance - then there could be confidence in the current contract.
Hackney Council, which is still facing a backlog of 10,000 benefit claims, is to introduce a new action plan that will ensure that more work is undertaken by council staff and less by ITNet. The council will be taking over the face-to-face work involved with people making claims.
In a joint statement, Jules Pipe and Eric Ollerenshaw, joint vice-chairmen of Hackney Council's Policy and Finance Executive Committee, said, "This is the top of the list of must dos we pledged to sort out. We want to see key parts of the operation taken back in-house and provided by Hackney Council, and are prepared to take whatever decisions are necessary to make this process work."
ITNet did not want to comment on the preliminary findings, but a spokeswoman said that ITNet likes to think it is working with the council to resolve the backlog.