Fraud-busting scheme to expand

22 May 08
A public sector anti-fraud initiative that has detected millions of pounds in benefits overpayments and some 'blatant and shocking' fraud is to be expanded to Whitehall departments this year.

23 May 2008

A public sector anti-fraud initiative that has detected millions of pounds in benefits overpayments and some 'blatant and shocking' fraud is to be expanded to Whitehall departments this year.

The Audit Commission's report on the English National Fraud Initiative in 2006/2007, published on May 20, shows that £140m in fraud and overpayment has been detected by the public bodies audited by the commission, a 26% increase from the last NFI round two years ago.

Audit Commission chair Michael O'Higgins said: 'These are not victimless crimes and some of the fraud found is both blatant and shocking.'

O'Higgins said more information was becoming available and the technology smarter, improving the results of the initiative, but public bodies needed to put the 'necessary trained staff' in place to work on the NFI.

Southwark council in south London was flagged up as a local authority that has embraced the NFI. Thirty of the 69 council properties recovered after detection of tenancy fraud were located in the borough.

The initiative works by matching data sets submitted to a secure website and identifying anomalies. This might be where an individual is claiming housing benefit but is also on the payroll of a public body. In one case in Lincolnshire, a market trader was receiving four different benefits, despite having savings of more than £100,000, running several businesses from home and enjoying expensive holidays. His wife was also claiming carers' allowance.

O'Higgins said: 'Not all authorities have understood just how powerful the matches have become. It's worth it for other authorities, it makes moral and financial sense.'

The next round of the NFI begins in October when it will be opened up to Whitehall departments and private sector companies.

Peter Yetzes, associate director for IT audit, told Public Finance that the expansion would be easy. 'The infrastructure is already in place. It's not something that's going to require a massive development – it has been done on a low budget really.'

The number of 'risk areas' for which data is available is also expanding. In 2006/2007, the single person council tax discount was included in the data-matching process for the first time, on top of figures on benefits, care home payments and pensions. 'Our audited bodies love it, it's made the whole investigative process so much easier,' Yetzes said.

The scheme has cost the commission less than £10m since 1996, O'Higgins said, and could be nearer £5m. There were also costs incurred by the public bodies investigating anomalies thrown up by the system.

Since 1996, the NFI has identified £450m in fraud and overpayment, which O'Higgins described as a 'pretty good value ratio'.

 

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