Benefit Fraud

AUDIT COMMISSION URGES PUBLIC SECTOR TO PUT GREATER EFFORT INTO ELIMINATING FRAUD

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

NFI has now identified around £450mn in fraud and overpayments since it started in 1996 at a cost of less than £10mn. 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.

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.”

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 sub-letting 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.

The Audit Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.

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 £180bn spent by 11,000 local public bodies.

WE’RE CLOSING IN ON BENEFIT THIEVES IN SPAIN

The Department for Work and Pensions has extended its successful benefit cheats hotline to the Costa del Sol and Canary Islands following its launch in Alicante in September 2008.

Residents in these popular ex-pat areas can report suspected British benefit thieves to a local number, and their concerns will be passed on by the operator of the hotline to a team of investigators in the UK.

Then Employment and Welfare Reform Minister Tony McNulty said, “We are absolutely determined to stop benefit thieves stealing from the British taxpayer. Our commitment extends beyond the borders of the UK. Even in sunny Spain, we’re closing in on benefit fraud.”

A publicity campaign, ‘We’re closing in’, in the local ex-pat media is raising awareness of the hotline as well as a dedicated website where suspected British benefit thieves living abroad can be reported online.

The total cost of benefit fraud committed by UK benefit recipients living in or travelling to countries abroad is an estimated £63mn a year. It involves a range of scams, such as people on means-tested benefits going abroad but failing to declare their absence and individuals working while claiming sickness benefits.

This initiative is part of a growing relationship between Spain and the UK on social security issues that already includes agreements to data-match and share death notifications.

• The Spanish benefit fraud hotline number is 900 554 440. It is free and confidential and operates from 8am to 4pm, Monday to Friday
• The hotline is run and funded by the Department for Work and Pensions (DWP), working with the Foreign and Commonwealth Office
• The dedicated website address is www.dwp.gov.uk/benefit-thieves-spain/ and provides more detail on what constitutes benefit fraud along with an online reporting form
• The Alicante hotline was launched as a pilot on 25 September 2008
• ‘We’re closing in’ is the DWP’s current benefit-fraud campaign.

COUNTRIES COME TOGETHER TO FIGHT BENEFIT FRAUD

On 30 April 2009, the Department for Work and Pensions (DWP) signed a historic arrangement with five other countries to enhance co-operation on tackling benefit fraud. This costs the UK taxpayer £800mn a year.

Recognising the benefits of mutual co-operation, the United Kingdom, United States, Canada, Ireland, Australia and New Zealand have come together to sign the ‘Windsor Arrangement’, which aims to achieve stronger prevention, earlier detection and effective deterrence of benefit fraud.

DWP Permanent Secretary Leigh Lewis said, “The six countries that have signed this agreement are all committed to fighting benefit fraud. This arrangement will ensure each country works together more systematically and, in turn, increase our individual and collective protection against those who seek to defraud our benefit systems. This historic agreement is just another sign of the co-operation enjoyed between our countries.”

The six signatories have agreed to work together to share intelligence and risk-profiling, to share strategies and best practice for combating fraud, to determine scope for carrying out investigations and enforcement for each other and to enhance understanding of the nature and extent of identity fraud.