Audit Commission urges councils to fight fraud with better use of data

Councils need to improve their use of data, information and intelligence to help "focus their counter-fraud work" and ensure that National Fraud Initiative (NFI) data matches are followed up effectively, the Audit Commission has said. In a report titled, Protecting the public purse 2011; fighting fraud against local government , the watchdog says that councils detected £185m worth of fraud in 2010-11 representing a 37% improvement on the previous year's figure, but that this is just the tip of the iceberg. Offering recommendations on how local authorities can improve fraud detection, the report says: "The department for Communities and Local Government should consider what arrangements will be required to collect and publish data on detected fraud against local public bodies, after the Audit Commission's abolition, and collecting and publishing information on properties recovered from tenancy fraudsters by housing associations." It adds that good data and information will allow councils to develop focused plans and strategies for tackling fraud and target resources on areas where prevention and detection can have the most impact. The Audit Commission also points out that its report is the sole source of evidence about the levels of detected fraud in local government and related bodies, and adds that the information it provides can help councils and other local public bodies by providing the data and information they need to tackle fraud effectively. The report recommends that the government needs to consider how to collate information on the number of homes recovered by housing associations from tenancy fraudsters. "Information on the number of homes recovered by housing associations from tenancy fraudsters is not available at all. The government should consider how it will address this information gap. It also needs to consider how best to encourage housing associations to tackle tenancy fraud," it says. It also cites the London borough of Havering as an authority that has used data effectively. In 2010-11 the council spent £40,000 to target high-risk single person discount claimants, using credit reference data. This helped it to save £300,000 and highlighted potential tenancy frauds, leading to the recovery of five properties from unlawful subletters. The commission has updated its online tool which compares recorded levels of single person discount with the predicted levels for the area. It says in the report that councils have used the tool "extensively" to identify fraud risks. Michael O'Higgins, chairman of the Audit Commission, said: "Councils are certainly acting on fraud, and it is now firmly on the government agenda. But our latest survey of detection rates shows that we may be seeing just the tip of a very large iceberg. "Our research shows high rates of council tax discount fraud and widespread unlawful occupancy of council houses. Now, for the first time, we are also able to publish details of fraudsters targeting care payments to the elderly and vulnerable. Also scams involving fraudulent student council discounts and fraud that goes to the heart of councils' multi-million pound procurement budgets." This article is published by Guardian Professional. For weekly updates on news, debate and best practice on public sector IT, join the Government Computing Network here.