To receive an update on the recent review of the approach to counter fraud activity across the Council.

The Committee considered a report by the Chief Finance Officer which updated Members on the recent review of the approach to counter fraud activity across the Council.  The following fraud related issues were covered:

·         Introduction of Single Fraud Investigation Service

·         Review of Current Arrangements

·         Benchmarking – The Local Picture and the National Picture

·         “Fighting Fraud Locally”

·         Draft CIPFA Code of Practice on Managing the Risk of Fraud and Corruption

·         Education Funding Agency Assurance for Schools

·         Establishment of a Corporate Fraud Team

The Chief Finance Officer explained how, as a part of Welfare Reform, the Department of Work and Pensions (DWP) was creating a Single Fraud Investigation Service (SFIS) which would bring together council, DWP and Her Majesty’s Revenue and Customs (HMRC) investigation services to investigate all social security benefit fraud.  To this end it was proposed that two of the Council’s benefit staff would be transferred to the DWP in May 2015 and become SFIS employees.  However, whilst the investigation of Housing Benefit fraud cases would transfer the amendment of Housing Benefit, dealing with error, verification and the calculation and recovery of overpayments would remain within councils until Housing Benefit was replaced by Universal Credit.

Members noted that whilst the transfer of staff, and the loss of government grant funding relating to combatting Housing Benefit fraud, was anticipated the SFIS would not assume responsibility for investigating non-benefit or local taxation fraud such as Council Tax Single Person’s discount or Tenancy Fraud.  As such the introduction of the SFIS had provided an opportunity to review the current arrangements for counter fraud activity within the Council and assess the risks of fraud. 

Arising from this the Committee noted that senior management had agreed to establish a Corporate Fraud Team to support the Council in delivering a counter fraud service. The team would be staffed by the four remaining Benefit Fraud Team and continue to report to the Head of Revenues and Benefits.

With regard to the local benchmarking of fraud detection performance the Chief Finance Officer drew Members’ attention to the summary (attached at Appendix A to the report) which showed Central Bedfordshire Council as having less detected fraud in each reported category in comparison with other Midlands and East of England metropolitan districts and unitary authorities.  He suggested that this could be as a result of there being less fraud within Central Bedfordshire than elsewhere or because of differences in reporting procedures between councils.  In response to a query he explained that a focused review of Council Tax discount fraud was undertaken every two years, rather than annually, because it was so resource intensive.  The Chairman drew the meeting’s attention to the Council’s bid to the Department for Communities and Local Government for funding to enable targeted investigation of Council Tax discount fraud and Council Housing fraud.

A Member sought clarification on the data contained in the summary (attached at Appendix B to the report) relating to the national outcome of the fraud and corruption survey, as reported by the Audit Commission in its publication “Protecting the Public Purse 2013”.  In response, and following consideration, the Chief Finance Officer undertook to seek an explanation from the Audit Commission and advise the Member.

RESOLVED

that the approach set out within the Chief Finance Officer’s report to the following be endorsed:

a)         the establishment of a Corporate Fraud Team;

b)        the development of an annual counter fraud work programme through closer working between the Corporate Fraud Team and Internal Audit;

c)         the production of an annual report on counter fraud activity for presentation to the Audit Committee.