Agenda item

The Chairman welcomed an interesting discussion ahead on the Counter Fraud Service and informed Councillors that they should be watchful of enquiring about the specifics of ongoing cases, or the tradecraft used to combat fraud given that the meeting was public.

The Head of Counter Fraud started by outlining the comprehensive approach to the fraud universe within Hillingdon. He briefly introduced his colleagues from the Service to the Committee, who would later brief Councillors on operational matters within their remit.

The importance of the 3-year Counter Fraud Strategy was explained first, which set out the four main principles for the service: firstly, partnership and engagement, which sought to communicate with services and create a counter-fraud culture; secondly, prevent, detect, pursue and deter, which was the cornerstone of the strategy; thirdly, innovation and modernisation, which sought to embrace new technologies; and finally, a risk based approach, in order to triage cases and enable resources to be deployed to most important areas, informing the annual work programme and ultimately the Fraud Risk Register.

In respect of the annual work programme, the Head of Counter Fraud informed Members that this would include criminal, civil, disciplinary investigations,  proactive projects to target areas of risk and also verifications, which was noted as unique to Hillingdon, where the service assesses a persons’ eligibility for certain services, including through data matching, in order to preventing fraud from entering the system in the first place.

The Committee was told how the service measured its success, which were in different ways, including key performance indicators which were reported upwards, benchmarking across other London boroughs and importantly, a financial loss prevention target each year, which was set by the Corporate Director of Finance and Cabinet Member and stood at £3.5m for the current year. It was noted that the service had actually exceeded this target with £10.7m of loss prevention to-date.

Providing more detail to Members, the individual Counter Fraud Managers present outlined the structure of their teams and their service responsibilities, which covered:

·         revenue and benefits investigations citing, for example, activity to ensure an £5.7m of business rates were secured by visiting premises and ensuring records and billing are up to date;

·         the data analysis unit which acted as the core of the service with referrals to it, and the ability to analyse and match data on cases, in conjunction with the London Fraud Hub, which enabled the provision of real-time information;

·         housing investigations, which covered housing applications, right-to-buys and verification of them prior to being accepted, along with investigating illegal subletting referrals and non-occupation of properties, which has helped bring much needed housing accommodation back into use;

·         outreach to residents through campaigns, such as the key amnesty last year;

·         investigations into fraud loss and error across social care, including section 17 cases and direct payments which were often complex in nature, along with blue badge fraud and;

·         consultancy reviews across Council services to support fraud risk mitigation and any disciplinary matters so required.

The Chairman thanked the officer team for their presentations and, in particular, welcomed how they had substantially exceeded their financial loss prevention target to-date, remarking that fraud on the Council was a fraud on all residents. Members of the Committee then asked a number of questions, which were responded to by officers present.

Firstly, it was queried when people registered a death and lived in a council property, how this would be picked up by the Counter Fraud Team and cross checked with tenancy details. Officers replied that such matters would be picked up through twice weekly data matching exercises from the London Fraud Hub.

In respect of the on-site Home Office immigration official, a Councillor sought information on how their role assisted in tackling fraud, to which officers replied it enables access to Home Office data and assists proactively with specific cases, where there are immigration matters.

On the London Counter Fraud Hub and the importance of knowledge-sharing, it was asked whether the function supported the capturing of information if people who commit fraud move from elsewhere in the UK into Hillingdon. Officers advised that whilst this was not entirely possible at this time, there were a number of other similar fraud hubs growing across the UK to share information which would assist in the future. There was also a national fraud initiative led by the Cabinet Office seeking to improve co-ordination of such work.

Councillors sought clarification on how the service balances its resources to tackle fraud, along with guidelines for sanctions and how this may progress through to the courts and publicity thereafter. Officers responded by stating that they apply both the evidential and public interest tests in cases along with factoring in mitigating circumstances. Other key factors that triaged cases to investigate or prosecute were those of the most financial benefit, cases with reputational risk and in particular, those matters that residents find most impactful, such as beds in sheds. It was noted that there were a number of live cases being prosecuted at present and that following any successful prosecution, the team would seek to publicise these across different channels for awareness and deterrent purposes.

In respect of corruption and bribery a Councillor cited there had been a rise in this across the property development and planning industry in recent years and asked if this had ever been experienced in Hillingdon. In response, officers advised they had never come across such cases or had to enforce the Bribery Act to-date in Hillingdon, but should such a matter arise, it would be taken extremely seriously.

Committee Members considered how the service could further publicise their activities, fraud outcomes and success stories, such as blue badge fraud, and make more use of Hillingdon People magazine. Members also considered how the Service could better seek local views on fraud priorities, in a similar way that Ward Councillors discuss crime priorities when liaising with local police teams. Officers supported calls for further publicity of their work and informed Members of recent publicity events, such as hashtag Fraud Awareness Fridays alerting the public to different fraud risks each week. It was accepted that the Service could undertake further external publicity, but internally within the Council, it was noted that there were regular information and communications events with services, to ensure that staff are fraud alert.

The Committee and officers discussed the number of fraud risks associated with the homelessness and housing journey for residents presenting and applying. It was noted that officers had to be very proactive in this area due to some instances of opportunistic fraud, such as people not being entirely honest or not giving full information. Work in this area, particularly around emergency accommodation whilst claims were being assessed, had resulted in accommodation coming back into use saving taxpayer money. Officers advised that a key aspect to this was the unique prior verification work undertaken by the service before any housing transaction progressed, which prevented people getting a council housing property or right-to-buy, if they were not eligible for it in the first place.

Building on the London Counter Fraud Hub model to share data, Members discussed whether there was a case for a more formal Fraud Directorate across London to ensure the high standards being achieved in Hillingdon were being applied more universally. Officers outlined to Councillors how Hillingdon’s Counter Fraud Service was not entirely structured in the same way as most other local authorities teams, with the example given of having revenue inspectors operate within the service itself, rather than in a separate revenues team. It was noted that Hillingdon’s Counter Fraud Officers were also particularly experienced with in-depth knowledge of the fraud world. It was advised that the service would always seek to look at innovative ideas, one of which being considered was leading a shared services or commercial model, on behalf of other local authorities.

The Committee then turned to the growing use of technology and cyber and, in-turn, the more sophisticated fraud opportunities. This was acknowledged by officers who informed Members that they worked closely with the Internal Audit Team responsible to highlight any fraud risks as part of the Council’s digital and transformation agenda.

A Councillor raised a point about a system error which had resulted in a delay in a housing application. Officers from the Counter Fraud Service advised that whilst this was not within their remit, if reported they would liaise with the housing service to get the matter rectified.

The Chairman thanked Officers for their attendance and the Committee for the in-depth discussion. It was agreed to a put on record the Committee’s appreciation of the good work of the service and the counter fraud activity it undertakes on behalf of the Council and resident taxpayers.

RESOLVED:

That the Finance and Corporate Services Select Committee:

1.    Received an overview of the work and operation of the Counter Fraud Service;

2.    Noted and commented on the Counter Fraud Overview report 2022/23; and

3.    Asked questions of the Head of Counter Fraud.