DCLG and CIPFA issue revised local government counter fraud strategy

23 Mar 16

Local government minister Marcus Jones and the CIPFA Counter Fraud Centre have today set out recommendations to help local authorities tackle fraud, which is estimated to cost councils £2.1bn a year.

The local government counter fraud and corruption strategy sets out the key steps that councils should take, including making greater use of technological advances such as smart phone apps and e-learning, to boost local initiatives.

The guide includes the ‘six Cs’ to help town halls tackle local fraudsters, including improving the culture, capability, capacity and competence in local authorities to ensure tackling fraud becomes part of daily business, as well as improving communication and collaboration. 

Today’s guide is an update to the 2011 Fighting Fraud Locally report, and states that, as fraudsters are constantly revising their techniques, local authorities need to do the same.

“There is a clear need for a tougher stance. This includes tackling cross boundary and organised fraud and corruption attempts, as well as addressing new risks,” the report said.

Although the 2011 plan helped councils acknowledge, prevent and pursue cases of fraud, there was now need to respond to an increased threat, the report said.

Of the estimated £2.1bn of annual fraud faced by local authorities, the largest two areas are procurement fraud (£876m) and housing tenancy fraud (£845m). Payroll fraud is estimated to be around £154m, while council tax fraud under localised discount schemes, is thought to be around £133m. Areas of increasing risk include fraudulent applications for business rates exemptions and reliefs, and fraudulent applications under the government’s expanded Right to Buy programme.

The 19 recommendations for local authorities also call on authorities to put in place a structured programme on fraud and corruption awareness for elected members and senior managers and to maintain an up-to-date fraud and corruption awareness programme. They should also profile their fraud and corruption risks using assistance in the document and ensure the right resources are in place based on the assessment of risk.

Senior officers within local authorities should also ensure that officers working in the counter fraud team are provided with appropriate accredited training, while CIPFA's Code of Practice on Managing the Risk of Fraud and Corruption should be used as a common standard.

Jones said these tips were invaluable to helping council “find, catch and prosecute the fraudsters”.

“We are determined to find, catch and prosecute the fraudsters who rip off councils denying taxpayers billions of pounds,” he stated.

“Across government we are clamping down on corruption and I’d urge councils to make full use of these suggestions to get tough on fraud.”

In addition, the government’s anti-corruption tsar and former local government secretary Sir Eric Pickles said better prevention, detection and prosecution would recover cash for frontline services.

“The tips we are publishing today – alongside the millions of pounds we have already invested – will ensure that town halls crack down on those who put our services at risk,” he added.

Other areas of risk identified in the strategy include new responsibilities taken on by local government, such as public health, and risks related to commissioning of services, including joint commissioning and third sector partnerships.

Ian O’Donnell, chair of the Fighting Fraud and Corruption Locally Board, said it is vital that councils are alert to emerging risks and get the right defences in place because fraudsters will exploit any weaknesses.

“This new strategy gives local authorities a clear and decisive set of actions to prevent and detect fraud. I know it will be warmly welcomed by everyone working hard to provide the best possible services for our communities,” he stated.

Rachael Tiffen, head of the CIPFA Counter Fraud Centre added that “councils are battling a persistent tide of people who think they can get away with dipping into the public purse”.

Fighting Fraud and Corruption Locally 2016 brings together a powerful coalition to share knowledge and keep one step ahead of the latest scams. Together, we will make sure the fraudsters get the punishment they deserve,” she added.

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