Fear over fraud investigator shuffle

by Mark Rowe

Government work against housing benefit fraud could suffer during an office shuffle of investigators, it is feared. That is according to the latest report from the National Fraud Initiative (NFI) part of the Audit Commission.

As it says, the new Single Fraud Investigation Service will eventually investigate all welfare fraud done against the Department for Work and Pensions, HM Revenue and Customs and local authorities. During the transition, the commission is concerned that housing benefit investigations will suffer as responsibilities shift. A decrease in the number of councils using an optional data match (housing benefit against student loans data) provides an early indication that this could be the case. The NFI says that it is working with the Department for Work and Pensions to mitigate, where possible, negative impacts that result from this change in policy.

In April 2015, the National Fraud Initiative will move to the Cabinet Office. The commission says that it anticipates that the transfer will go smoothly given the already positive and active engagement of colleagues at the Cabinet Office.

The latest NFI report highlights that the Audit Commission’s data matching exercise has identified a further £229m of fraud, overpayment or error in England, Scotland, Wales and Northern Ireland, since it last reported in May 2012.

The highest value categories identified in England continue to be pensions (£74m), followed by council tax single person discount (£39m) and then housing benefit (£33m).

The total value of cases of fraud, overpayment or error identified by the NFI is lower, albeit the number of cases rose by 19.4 per cent over the same period. The Commission believes this potentially indicates that participants are more effective at early detection of fraud, over-payment and error. This will have been helped by the commission’s introduction of a new service, NFI Flexible Data Matching, which has made it possible for participants to make near-instantaneous data matching at any time.

Chairman of the Audit Commission, Jeremy Newman says: ‘We publish a report from the NFI every two years and continue to produce great results. The national figure for identified fraud, error and overpayment, that would otherwise be lost to the taxpaying public, is down by £46m compared to the previous report although the number of cases has increased by nearly 20 per cent. This is great news if, as we believe, it is due to improving detection rates. However, we cannot be complacent. The more participants in the exercise, the richer the data for everyone involved and the harder it is for fraudsters to hide from detection. We know there are areas struggling to tackle fraud effectively, such as in the housing sector, and with only 35 housing associations participating in the exercise, we need greater involvement to get even better results in this area.’

In 2012, the Commission reported that only two central government departments, the Department for Communities and Local Government and the Highways Agency, were actively involved in the initiative. The exercise now has 13 central bodies taking part. The Commission’s Chairman has welcomed the Cabinet Office, Home Office, Department for Health, HM Revenue and Customs and the Department for Work and Pensions among others to the initiative. The NFI team hope this all of central government will be included. In the meantime, the NFI is working with these departments to target specific fraud risks.

Mr Newman adds: ‘The NFI has identified over £1.17 billion in fraud, error and overpayment since its launch. The overall value of the fraud, overpayment and error found is 82 times greater than the £1.4m a year cost, representing excellent value for money. I anticipate this consistent success will continue, especially as we transfer the NFI into such safe hands. I would like to thank the Commission’s NFI team for their dedication to the exercise over its eighteen year history. I also thank colleagues at the Cabinet Office for all their hard work and preparation to ensure continuity of service when we close. The NFI team’s knowledge, skills and dedication has ensured a lasting legacy for the initiative and gives me every confidence that the NFI has a bright future.’

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