Mr Graeme Thomson, Programme Director Counter Fraud (Data Analytics, Capability Development, and Pilots) Counter Fraud Centre of Expertise, Cabinet Office, gave a presentation on the work of his department and the National Fraud Initiative (NFI).

Mr Thomson briefly explained that the NFI had been running since 1994 and was initially the responsibility of the Audit Commission before being moved to the Cabinet Office. Mr Thomson said his team was responsible for setting the professional standard in counter fraud and providing data analytics to central and local government.

Mr Thomson said the Digital Economy Act 2017 paved the way forward for cross departmental and local government sharing of information. His team is responsible for setting up pilot schemes to embed good practice across the sector. For example, pilots had been set up for debt recovery which involved HMRC and ten local authorities. Data extraction and data matching exercises were undertaken biennially in order to identify fraud from the public purse.

In addition, Mr Thomson stated that the Cabinet Office manage the Internal Fraud hub, which records action taken against civil servants who had committed fraud. Departments were working to ensure individuals were not employed elsewhere in the civil service after they had been convicted and/or disciplined for fraud related offences. The aim was to extend this pilot to local government but this would require a change in government policy.  

Other pilots running were with Companies Houses, to identify fraudulent companies, the Insolvency Service and the Charity Commission. Once the pilots had been evaluated, data would be shared with local authorities.

In response to questions from Members the following was noted:

·         Members welcomed the presentation and the important work of sharing data to identify fraud. However Members asked for central government to be aware of the downside of automatically identifying fraud and the freezing of benefits. Councillor Marc Francis said he saw many constituents who had experienced difficulty with HMRC whereby their benefit was frozen pending investigation. This causes hardship and can lead to a spiral of debt. Mr Thomson responded saying no decision to flag up fraud was made without discussion. Artificial intelligence was not used in making decisions and there is due diligence in the work they do. However he welcomed the observations of Members and asked that any further comments or suggestions be made via the Council’s counter-fraud team.

The Chair, Councillor Val Whitehead thanked Mr Thomson for this presentation.

Mr Lino Messore, from the Counter Fraud team then proceeded to present the NFI progress report

Mr Messore said the data matching exercise was undertaken in late 2018, when data was supplied for data matching purposes by all relevant parties, including the Council. Mr Messore said through the NFI system cases of potential fraud are identified for investigation and are rated as low, medium or high risk. The table at paragraph 3.13 showed the material risks emerging from the examination of the data. So far the Counter Fraud team had looked at 4,500 matches and paragraph 3.16 of the report showed the actual and estimated outcomes for 2018.

In response to questions for Members the following was noted:

·         Of the 4,500 referrals, 3,900 matches were closed off without issue.

·        Pension recovery cases related to pensioners who had died but the authority had not been notified and an overpayment had occurred. The counter fraud team recovered 130 blue badges where the recipient had died and the badges were still in circulation.

·         In response to how many cases led to prosecution, Mr Rock, Head of Internal Audit said the NFI data matching exercise was not just about prosecuting individuals but also a data cleansing exercise picking  up anomalies such a wrong digit in a National Insurance number.

·         Mr Rock confirmed that the Corporate Fraud Team worked alongside other colleagues within the Council to identify and investigate fraud. Regarding Blue Badge fraud the team worked with housing enforcement officers and anti-social behaviour teams.

The Committee RESOLVED to:

1.    Note the progress made against the National Fraud Initiative Exercise for 2018/19.