Agenda item
Protecting the Public PurseFraud Briefing 2013
To note the contents of the report and take account of the matters raised by the Audit Commission in their report; and also to make suggestions and recommendations as necessary to assist in the management of fraud risks.
Minutes:
Mr Bryce, Head of Counter Fraud at the Audit Commission presented in his annual fraud briefing. He advised that the focus of his briefing this year would be the antifraud activities of local authorities and that further national data was available via the Audit Commission.
The context of his presentation was “Tower Hamlets’ fraud detection performance and its comparison with other local authorities”. In his presentation he asked the Committee to consider the returns gained against the resources employed in addressing its priority fraud areas and whether
National Picture - It was estimated that fraud activities caused an annual loss of over £2 billion.
Mr Bryce argued that that fraud was not a victimless crime since its consequence was the availability of fewer resources, in terms of access to financial support and housing, to those in genuine need. Noting that councillors were charged with governance of public funds, he asked the Committee to consider how the Council compared to other authorities in terms of fraud detection (strategy and priorities) and its local priorities. He also challenged the Committee to consider how resources were targeted and whether, in the local context, the best returns were to be gained from addressing high-value fraud or high-volume fraud.
Mr Bryce advised that, nationally, of the fraud cases detected in 2012 - 13 (excluding social housing fraud), the largest proportion concerned housing benefit fraud. He noted that housing benefit fraud was the area where most detection work was directed and asked member to consider whether the focus on other areas would be more efficient to pursue. The Committee noted that the scope of Tower Hamlets’ comparative performance against that of other London boroughs was reported within the appendices to the report.
In terms of the total detected cases in 2012 - 13 (1440 cases) and the monies recovered valued at £989,565, Mr Brice challenged the Council to consider which areas of fraud it would be most efficient to address.
The areas of fraud which the Audit Committee monitored and reported were: housing benefit fraud, council tax benefit fraud, council tax discount fraud social housing fraud, right to buy fraud and disabled parking (blue badge) fraud.
Mr Bryce advised that forthcoming changes would be brought about by the establishment of the Single Fraud Investigations Service that would be organised by the DWP and which would take over the authority's caseload in relation to housing benefit fraud. This transition would occur in the forthcoming 18 months and therefore data-matching in relation to this type of fraud would be affected.
Noting that this large area of work would then fall to the DWP, Mr Bryce advised that councils would need to consider where their investigative resources then would best be focused. He challenged the Committee to consider some common areas of fraud such as single person discount fraud and student (Council Tax) discount fraud, whether retrospective sanctions would be appropriate and what principles it wished to pursue in following these.
The Committee was informed that it would receive information concerning how much money had been successfully recovered in regard to student council tax discount and single person council tax discount.
Action by: Minesh Jani, Head of Audit and Risk Management
Mr Bryce advised that successful recovery of frauds gave councils a funding advantage because of the revenue support grant. The following were noted:
· Registered social landlords antifraud work did not fall within the remit of the audit commission
· Because of the high levels of social housing stock within the borough the effects of fraud activity on registered social landlords would be greater. Mr Bryce advised that levels depending on how many were investigated. Additionally the Audit Commission recommended that councils work with registered social landlords to address housing benefit fraud.
It was noted that the Council negotiated with social landlords to recover properties and was receiving cooperation from these organisations to enable properties to be more appropriately utilised by eliminating social housing fraud.
The Anti-Fraud Manager advised that the Council was engaging in high levels of data-matching and therefore, in future years expected to achieve better results. Additionally it was noted that there was some co-funding with Tower Hamlets Homes for the investigation of social housing fraud in the Borough.
In considering which types of fraud were the most appropriate to pursue the members considered the following:
- the Council’s housing benefits team was funded by DWP and was focused on housing benefit fraud
- The remaining resources of the antifraud team were employed to undertake a more general investigations.
Presently work was being carried out to assess which frauds the Council should best pursue. It was noted that there were obvious benefits to pursuing frauds, which resulted in income to the Council; however it was necessary not to neglect other areas of fraud as the reputation of the Council might be affected. It was noted that The Proceeds of Crime legislation was to be shortly enacted and this would enable the Council to pursue recovery of money acquired through fraudulent activity and also that pursuit of financial recovery and financial gain needs to be balanced against the levels of harm caused by different types of fraudulent activity
It was noted that right-to-buy fraud was a potentially high frequency and high-value area of fraud activity. The fraud concerned the discount offered to tenants under the right-to-buy scheme and also affected other areas of social benefits.
It was noted that there had been good performance regarding detection of blue badge fraud. Of the frauds detected, it was noted that the largest proportion concerned fraudulent applications for blue badges in other areas. Detection was fond to be concentrated around sites of health care delivery in particular the London Hospital, Whitechapel.
Other types of fraud detection performance were in the areas of procurement, insurance, social care, economic, third sector, and internal fraud - including school frauds.
Mr Bryce recommended that the Council focus its anti-fraud work on
- blue badge fraud
- Schools frauds. He also encouraged collaborative engagement with free schools and academies in the borough to address this area of criminal activity
- Social care fraud. This, because of the implementation of the personalisation agenda was an area that was expected to witness increasing levels of fraud activity.
- Internal fraud. This recommendation was based on the fact that while the value per case might be low, there would be high value fraud activities interspersed with these.
In response to questions from the Committee, the following information was provided:
The Audit Commission measured fraud activity. During 2012 – 13 data on activity had been requested with an aim to increase the quantity of benchmark data available and to use this for future data matching exercises.
The Audit Commission supported investigation of rateable assets fraud and activity to promote detection of business rate frauds across the spectrum.
It was noted that fraud of charitable status registrations was an area that might be pursued as there were some suspicion that not all organisations claiming full charitable benefits were operating under wholly charitable principles.
RESOLVED:
- That the content of the report and presentation be noted
- That the matters raised by the Audit Commission be noted
- The recommendations of fraudulent areas of activity which the Council is recommended to pursue be noted
Supporting documents:
- Fraud Briefing 2013 Report _1712 2013, item 3. PDF 83 KB
- Protect Pub Purse - Dec 2013, item 3. PDF 1 MB