Agenda item
Protecting the London Purse
A benchmarking presentation from Alan Bryce, formerly Head of Counter Fraud at the Audit Commission.
Minutes:
The Committee received a presentation from Alan Bryce, Non-executive Chair of the European Institute for Combating Corruption and Fraud (TEICCAF)
The Committee noted:
· Tower Hamlets Council participated in the fraud detection scheme “Protecting the London Purse” which was administered through TEICCAF.
· The Council was able to use the outcomes of this benchmarking exercise to determine where it wished to target its resources to achieve the most effective antifraud activity.
The Committee was informed of the results of a range of benchmarking exercises relating to antifraud activities undertaken by London Councils and noted the following:
- Council Tax Fraud - typically comprised around 4-6% of claimants. Mr Bryce recommended that the council consider what deterrents are appropriate in terms of its Council Tax Fraud strategy. He suggested that the strategy be re-examined foe this purpose and noted this was not the largest area of loss for the Council.
- Tenancy Fraud (sub-letting Council properties for profit). - This was the second largest area of financial loss to Council's and the most common type of fraud in London, accounting, for around 4% of social housing fraud. Tower Hamlets was performing below benchmark in this area and encouraged the Council to conflict continued to pursue this antifraud detection.
- Right to Buy Fraud. - Right-to-buy discounts had recently increased. In London boroughs the potential discount was up to £100,000 and therefore this type of fraud was attractive. Discounting was expected in the forthcoming two months and therefore more right-to-buy fraud headlines were also anticipated. Mr Bryce advised that the Council had taken the appropriate action of reconfiguring its attention towards right to buy fraud in the present circumstances relating to public sector housing. On average, around 3% of right to buy applications in London were fraudulent. Mr Bryce also advised that the Council take account that most housing associations had no facilities to tackle tenancy or right to buy fraud and noted that council’s resources and expertise could be advantageous therefore.
- Blue Badge Fraud. – Tower Hamlets had the highest detection rate amongst London Boroughs in 2014-15. The average value per case was £500, however the value to the public in addressing this kind of fraud was at the heart of community values.
- Procurement Fraud -This was the largest single area loss to local authorities. Mr Bryce and recommended that the council should continue to pursue detection of this type of fraud.
- No Recourse to Public Funds Frauds - This type of fraud related to migrants in specific circumstances and was the second largest area of fraud in London. In addition it was an area open to abuse by individuals and by organised crime. The average value of fraud was £25,000 per family and funds were sourced directly from local authorities’ resources.
Mr Bryce recommended investigation of the following types of fraud to assess the significance of monies lost in the public purse:
- Social Care fraud
- Insurance fraud
- Grants fraud (economic and the third sector grants)
- Internal fraud (Mr Bryce recommended that this area should be investigated as the average value of these frauds represented around 12%, therefore potentially amounting to significant sums)
The Committee made the following comments:
- The deterrent fraud work carried out by councils should be advertised prominently and also the sums recovered publicised
- That fines are properly levied against frauds detected.