BACKGROUND
1
Fraud is a
significant risk to the public sector. The government estimates
that the taxpayer loses up to £51.8 billion to fraud and
error in public spending every year.
Financial loss due
to fraud can reduce a council’s ability to support public
services and cause reputational damage.
2
Veritau delivers a
corporate fraud service to the council which aims to prevent,
detect and deter fraud and related criminality. The counter fraud
team investigate allegations of fraud, plan and take part in
counter fraud campaigns (eg the National Fraud Initiative),
undertake fraud awareness activities with staff and the public, and
maintain and update the council’s counter fraud framework and
associated policies.
3
The purpose of this
report is to update the Committee on counter fraud activity up to
31 January 2023.
FRAUD MANAGEMENT
4
Veritau undertakes a
range of non-investigative activity to support the development of
counter fraud arrangements at the council. The council’s
counter fraud framework was reviewed and updated in January. This
included a revised strategy action plan and fraud risk
assessment.
5
A key objective for
the counter fraud team is to raise awareness of fraud with members
of staff and the public.International Anti-Corruption
Day was marked in December by providing information to employees
about the threat of bribery and money laundering to the council.
This followed earlier exercises during International Fraud
Awareness Week in November, Cyber Security Awareness Month in
October, and World Whistleblowers’ Day in June.
6
Fraud awareness
training has also been provided to staff working within adult
social care, housing management, housing registrations, housing
options and parking enforcement in 2022/23.
MULTI-AGENCY WORK
7
The National Fraud
Initiative (NFI) is a large-scale data matching exercise that
involves all councils and other public sector bodies in the UK. The
work of the NFI is overseen by the Cabinet Office and the exercise
runs every two years. The results of the 2022/23 datamatching
exercise have now been released. There are 7,500 matches to be
reviewed by the counter fraud team and other teams across the
council.
8
The council are
required to respond to requests for information from the Department
for Work and Pensions (DWP) who investigate Housing Benefit fraud.
In cases where council tax support is in payment, the counter fraud
team can jointly investigate with DWP counterparts. The team have
responded to 40 requests for information to date.
INVESTIGATIVE WORK
9
In 2022/23, the
counter fraud team has received 256 reports of suspected fraud.
These cover areas including adult social care, social housing,
council tax, council tax support, internal fraud, parking, and
business rates.
10
Up to 31 January
2023, the team has helped the council to achieve £143k in
savings and £7k in Covid-19 related savings. The team has
completed 103 investigations and there are currently 63 ongoing
active cases. To date, formal warnings have been issued to 28
people. Two council properties have been recovered. Three internal
investigations have been completed. Payments were blocked following
two attempts to commit mandate fraud against the council. In
addition, the team has helped the council verify 41 applications
relating to applications for Right to Buy. One Right to Buy
application has been stopped.
11
A summary of
investigative work can be found in appendix A, below.
APPENDIX A: SUMMARY OF INVESTIGATIVE WORK 2022/23
The table below shows the
success rate of investigations and levels of savings achieved
through counter fraud work in 2022/23.
|
|
2022/23
(As at
31/01/23)
|
2022/23
(Target: Full
Yr)
|
2021/22
(Actual: Full
Yr)
|
|
Amount of
actual savings (quantifiable savings - eg repayment of loss)
identified through fraud investigation
|
£143,519
|
£200,000
|
£205,328
|
|
Amount of
savings identified relating to Covid-19 grant related
fraud
|
£7,604
|
n/a
|
£60,000
|
|
% of
investigations completed which result in a successful outcome (for
example payments stopped or amended, sanctions, prosecutions,
properties recovered, housing allocations blocked)
|
51%
|
30%
|
47%
|
Caseload figures for the period
are:
|
|
2022/23
(As
at 31/01/23)
|
2021/22
(Full
Year)
|
|
Referrals
received
|
256
|
381
|
|
Number of
cases under investigation
|
63
|
69
|
|
Number of
investigations completed
|
103
|
133
|
|
Number of
verifications completed
|
41
|
94
|
The chart below shows the
proportion of different case types under investigation as of 31
January 2023.
|
Activity
|
Work
completed or in progress
|
|
Fraud detection and
investigation
|
The service promotes the use of
criminal investigation techniques and standards to respond to any
fraud perpetrated against the council. Activity to date includes
the following:
·
Housing fraud
– Two council properties have been
recovered by the council as a result of investigations by the
counter fraud team. One property was being illegally sublet to
relatives of the tenant and the other had been abandoned. Both
properties have now been assigned to people on the housing waiting
list. The team have completed fourteen investigations in this area
and there are eight cases currently under investigation.
Forty-three Right to Buy applications have been examined as part of
anti-fraud verification reviews. One Right to Buy was blocked as a
result of information gathered in the review process.
·
Covid-19 related
fraud – Investigations relating
to Covid-19 grants and payments are now almost complete. There are
currently three ongoing cases. Two relate to grants made to
businesses and one is a Test and Trace Support Payment made to a
member of the public. The team have completed eighteen
investigations in 2022/23, resulting in seven written warnings
being issued, one referral to the police, and an application being
blocked before payment was made.
·
Adult Social Care
fraud –
The team has
completed six investigations in this area and eight are ongoing.
Savings of £53k have been made by the council as a result of
investigations.
·
Internal
investigations – Three internal
investigations have been completed. There are currently four
ongoing investigations.
·
External (or
third party) fraud – The team have completed
five investigations to date, and one is ongoing. Two attempted
mandate frauds (payment diversion frauds) have been prevented in
2022.
·
Council Tax
Support fraud – Seven investigations
have been completed in this area and there are fifteen cases under
investigation. Work in this area has resulted in £50k of
savings for the council in 2022/23 to date.
·
Council Tax fraud
– Fifteen investigations into
Council Tax offences have been completed in 2022/23. Two people
have been issued with formal warnings and a further five people
have been invoiced for unpaid Council Tax. There are ten ongoing
investigations; all but one relate to suspected single person
discount fraud.
·
Business rates
fraud – Two investigations into
business rate fraud have been completed in 2022/23. Both resulted
in formal warnings being issued.
·
Parking
fraud – Twenty-six
investigations into parking fraud have been completed which
resulted in fourteen formal warnings being issued. While most
related to the misuse of disabled blue badges there has been an
increase in fraud associated with parking permits being used to
facilitate parking at holiday accommodation. Where possible
businesses or property owners have been billed for not using
commercial parking permits and this has resulted in £12k of
payments to the council in 2022/23.
|