Audit Commission urges public sector to put greater effort into eliminating fraud

21 May 2008 02:06 PM

A record £140 million in fraud and overpayment has been detected by the Audit Commission's National Fraud Initiative (NFI) report 2006/07, published today. This is a 26 per cent increase from £111 million in 2004/05.

NFI has now identified around £450m in fraud and overpayments since it started in 1996, at a cost of less than £10m. Despite this success, however, the Commission is calling on the public sector to devote more resources to using the NFI information to track down fraud.

The NFI is the country's largest public sector anti-fraud programme. It is a computer based system, which matches information such as housing benefit claims, pensions and social housing records from local councils, the NHS, police authorities, local probation boards and fire and rescue authorities across England.

The matching process enables public bodies to share and compare information through a secure website, and to identify those taking services or money that they are not entitled to. Typical examples include home owners pretending to be homeless and renting (and sub-letting) council property in two different authorities, fraudulent claims for housing benefit and pensions being claimed for deceased people. (Case studies follow).

Michael O'Higgins, Chairman of the Audit Commission said: 'These are not victimless crimes and some of the fraud found is both blatant and shocking. People are stealing homes, pensions, student loans, parking places and benefits, seemingly confident that no one is tracking them. They are wrong. We urge all public bodies to put in place the necessary trained staff to work with us and follow up any matches. It makes both moral and financial sense to detect fraud and overpayments.'

* URLs to the NFI Report and Summary:

http://www.audit-commission.gov.uk/press/preview/nfi/NFI2006-07–summary.pdf (new window)

http://www.audit-commission.gov.uk/press/preview/nfi/NFI2006-07–NationalReport.pdf (new window)

CASE STUDY

Housing tenancies

One example of the kind of fraud that was discovered:

A tenant who had made a homeless application and was given a tenancy in Southwark had actually bought a property in the London Borough of Barking and Dagenham. Further investigations revealed that the person had also obtained another property from Southwark, using a different name, and was not living in either but subletting both the Southwark properties. Both tenancies were terminated.

Southwark Council is an example of how focusing the National Fraud Initiative information on tracing people who take money and services that they are not entitled to frees them up for those in need For NFI 2006/07 Southwark Council gave the full range of NFI housing matches to an experienced housing investigator, who was given time and support to follow them up.

The outcomes so far include:

• The recovery of 30 properties, with a further 19 recoveries anticipated, freeing them for genuine tenants and ending the need for expensive temporary accommodation; and
• the identification of 65 cases where a right to buy application has been awarded inappropriately.

Notes to editors

1. The Audit Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.
2. Our work across local government, health, housing, community safety and fire and rescue services means that we have a unique perspective. We promote value for money for taxpayers by auditing the £180 billion spent by 11,000 local public bodies.

FOR FURTHER INFORMATION PLEASE CONTACT: AUDIT COMMISSION PRESS OFFICE ON 0844 798 2128