The fraud files

With the 348 local authorities in England and Wales preparing for spending constraints and budgetary cuts, it is imperative that the work already undertaken in combating local government fraud continues.

The National Fraud Authority estimated in January this year that local government fraud cost £684 million in 2008 alone, with £550 million as a result of housing tenancy fraud.

One fraud fighting method that can be successfully employed is the sharing and comparison of data, information and experience held between local authorities and their various departments. Statistics from the Audit Commission, the independent watchdog that monitors the £200 billion annual spend of 11,000 local public bodies, in its latest bi-annual report published last month following the National Fraud Initiative conducted during 2008/09, have proved this.

The NFI is essentially a data matching exercise utilising sophisticated computer techniques to process and compare data sets (including council tax and payroll records, electoral registers, expired visa and pension payments) between the 1,300 participant organisations to identify errors, overpayments and fraud. Since its inception in 1996, the NFI has produced total savings of £664 million with an increase between 2006/07 and 2008/09 figures of 54 per cent to £215 million.

Among the benefits derived from the 3.5 million data matches identified (5 per cent of which were rated as requiring urgent attention) were £78 million in pension frauds and overpayments, £56 million of single person discounts for council tax fraudulently or wrongfully received and the recovery of 97 properties for social housing needs. At a time when the numbers of those in need of social housing vastly outstrip the number of properties available, the true value of this for those families now tenanted within these properties is immeasurable.

Coupled with the recovery of property and payments, the NFI has also been responsible for the sanctioning of those found responsible for fraud. So far, the data matching has enabled 269 prosecutions for offences discovered and has given rise to sentences including custodial terms, community service orders and repayment orders.

However, notwithstanding the success to date, there is still far more to be achieved in order to effectively reduce housing tenancy fraud. The practice of sharing data through initiatives such as the NFI will serve to reduce fraud losses and amplify the message that dishonesty will not be tolerated, will be identified and that the sanctions applied to those found responsible will be severe. However, to achieve this there has to be greater participation and communication between interested parties, particularly within government, since only one government agency and no government departments took part in the 2008/09 initiative.

andrew.gillett@weightmans.com

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