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CONTENTS
3 Background
3 Key Performance Figures
4 Analysis of Results
5 Whistleblowing
6 Counter Fraud Management
7 Appendix A: Counter Fraud Activity
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BACKGROUND
1 Fraud is a significant risk to the public sector. The government estimated that between £33.2 and £58.8 billion of public spending was lost to fraud in 2020/21[1]. Financial loss due to fraud can reduce a council’s ability to support public services and cause reputational damage.
2 Veritau provides a corporate fraud service to City of York Council which aims to prevent, detect and deter fraud and related criminality. We use qualified criminal investigators to support departments with fraud prevention, proactively identify issues through data matching exercises, and investigate suspected fraud. To deter fraud, offenders face a range of outcomes, including prosecution in the most serious cases.
3 The counter fraud team also plans and takes part in counter fraud campaigns (eg the National Fraud Initiative), undertakes fraud awareness activities with staff and the public, and maintains and updates the council’s counter fraud framework and associated policies.
4 This report provides the Audit and Governance Committee with a summary of counter fraud activity completed in 2023/24. It also details whistleblowing reports received and the types of concerns that have been reported.
KEY PERFORMANCE FIGURES
5 Veritau helped the council to achieve £208k in counter fraud savings in 2023/24, against an annual target of £200k.
6 The team received 377 referrals of suspected fraud during the year including reports from the public, council employees, external agencies, and issues identified through proactive exercises. One hundred and nineteen investigations were completed in 2023/24 with successful outcomes achieved in 55% of cases[2].
7 Three people were successfully prosecuted by the council following investigations by the counter fraud team, seven people accepted formal cautions, warnings were issued to 21 people, five internal fraud investigations were completed, 12 holiday let owners had their residential parking permits removed, and debts owed to the council were calculated in a further 17 cases.
8 In addition, the counter fraud team reviewed 53 applications made under the Right to Buy scheme and one application for school placement.
9 A detailed summary of performance can be found in appendix A, below.
ANALYSIS OF RESULTS
10 Veritau has an annual target of £200k to achieve in fraud related savings. These savings comprise the repayment of debt arising following investigative work, a maximum of one year future savings if an investigation has stopped an ongoing fraud that would otherwise have continued, and the prevention of any one-off payments that would have been made without our intervention, eg a Right to Buy discount. The chart below shows the areas where savings were achieved in 2023/24.
11 Over the past six years Veritau has helped the council to achieve £1.6 million in counter fraud savings, increasing to over £1.8 million including savings associated with Covid-19 grants.
WHISTLEBLOWING
13 One whistleblowing concern was logged by Veritau in 2023/24 which relates to potential misconduct by a council employee. An investigation into the concern raised is ongoing.
14 The figure below shows the number of whistleblowing reports recorded over the past six financial years – 16 in total.
15 The following figure details the categories of whistleblowing reports received over the same period.
COUNTER FRAUD MANAGEMENT
16 Veritau undertakes a range of non-investigative activity to support the development of counter fraud arrangements at the council. Raising awareness of fraud amongst council employees and the public is an important function of the counter fraud team. Awareness campaigns were undertaken to mark International Fraud Awareness Week and International Anti-Corruption Day in November and December 2023 respectively.
17 Cybercrime is a high risk area for the council. In October 2023, as part of Cyber Security Awareness Month, Veritau worked alongside the council’s communications team to raise awareness amongst all employees of the threat of cybercrime, how to spot it, and how to prevent it from happening.
18 Bespoke training was provided to employees working within the revenues, benefits, customer services, and disabled facilities grants teams in 2023/24. Training on blue badge fraud was also provided to the Gough & Kelly team who facilitate the entry of badge holders to the city centre. Training on financial frauds and scams was provided to finance officers working within maintained schools. The counter fraud team also produces regular newsletters for revenues, benefits, and adult social care employees which highlight recent frauds in those areas occurring locally and nationally.
19 The council is a member of the National Anti-Fraud Network (NAFN). NAFN provides investigative resources which support the counter fraud team as well as trading standards. NAFN releases urgent intelligence alerts relating to frauds experienced by other councils. The counter fraud team ensures that these alerts are sent to relevant council officers.
20 The team maintains a fraud reporting telephone number and a dedicated email address[3]. We work closely with officers and encourage members of the public to report any concerns they have about fraud affecting City of York Council.
21 The council participated in an annual National Day of Action against blue badge fraud in June 2023, alongside 80 other councils. The exercise involved making checks on blue badges displayed in the city to determine if they were being used by legitimate badge holders. The counter fraud team worked alongside parking officers to check 84 blue badges over the course of the day. This initiative resulted in two members of the public accepting formal cautions and one person being issued with a warning about their conduct in relation to blue badge misuse.
22 The counter fraud team is an active participant in regional and national counter fraud groups. Veritau is a member of the Yorkshire and Humber Counter Fraud Group and Tenancy Fraud Forum. Veritau participates in and chairs a national Fighting Fraud and Corruption Locally working group examining issues surrounding adult social care fraud and has presented on the subject at two national counter fraud conferences in 2023/24.