The investigation by public services ombudsman Peter Tyndall found "numerous and severe" failings in accuracy, performance and statutory targets. The probe was triggered by a complaint from a single mum who was forced to take out an overdraft to pay her rent and had to apply for a crisis loan to pay for heating fuel. A second complainant said the council had failed to respond to his letters.

The council has been ordered to pay them £1,500 each and recommended "urgent action". The authority said the service had already improved.

Mr Tyndall said the council had not given enough resources to process benefit claims while it introduced a new software system. He noted that problems started before this and ended after the computer upgrade.
Failure to keep a log of correspondence also meant staff duplicated work and asked claimants for information they had already given.

In both complaints, the ombudsman concluded there had been a "maladministration" in the council's service.

The ombudsman recommended the council "improve its housing benefit performance through training, improved systems and communication between staff".

A spokesman for the council said: "Members will decide how to formally respond to failings highlighted within the Authority's Benefits Section.

"Maladministration in the cases of two Anglesey residents claiming benefits is not disputed and officers will recommend that compensation should be paid. Several measures have already been taken to improve performance."

The report will be discussed at a full council meeting in September.
Corporate director of finance David Elis-Williams challenged the findings of the report, and said: "The benefits section deals with very complex legislation, administering benefits to more than 6,000 claimants in Anglesey. During the period covered by this report, we have actually improved performance, successfully introduced new legislation like the Local Housing Allowance, and received positive feedback from stakeholders. Despite the system change, the vast majority of claimants received correct payments throughout the period.

This shows that the benefits section is clearly not a 'dysfunctional service', as claimed by the ombudsman. It has had problems, but we're certainly on the right path towards resolving them."