Fighting Fraud Locally Progress this year

Ian O’Donnell Chair Fighting Fraud Locally Board and

Rachael Tiffen FFL Board

The NFA Annual Fraud Indicator 2012

Fighting Fraud Locally- official NFA /

Board Slides

Fighting Fraud Together

• Published 12 October 2011, it is a shared strategic plan setting out the context for the national fraud response

• 37 organisations initially signed up, from across all sectors – Public – Private – Voluntary – Regulators – Law enforcement

• By 2015 our country will be demonstrably more resilient to and less damaged by

fraud through:

– Individuals, businesses, public and voluntary bodies detecting and preventing more fraud

– Law enforcement and other partners increasing risk of disruption and punishment to organised and opportunistic fraudsters, thus deterring potential criminal offenders

Fighting Fraud Locally- official NFA /

Board Slides

The Response to Public Sector Fraud

• £20 billion is estimated to be lost to fraud in the public sector every year

• Cabinet Office Counter Fraud Taskforce, established in October 2010 to tackle fraud, error and debt in public services

• Lessons being learned from private sector best practice

• Pilots using data analytics to tackle fraud and error show some phenomenal results

– £12 million of savings delivered in the first six months

– Estimated savings, once rolled out, of £1.5 billion by 2014/15

• Eliminating Public Sector Fraud, June 2011

• Reducing Fraud and Error in Government February 2012, programme of activity to reduce fraud against government revenue and spend

• Recommendation that lessons of task force extend to local government

Fighting Fraud Locally- official NFA /

Board Slides

Annual Fraud Indicator 2012: Fraud Loss

Fraud Type Fraud Loss

Housing tenancy fraud £900 million Procurement fraud £890 million ( £855m) Payroll fraud £153 million ( £152m) Council tax fraud £131 million (£90m) Blue Badge Scheme misuse £46 million Grant fraud £41 million (£43m) Pension fraud £5.9 million

Fighting Fraud Locally- official NFA / Board Slides

Why we need to tackle fraud and error

Local government could be suffering over £2.2 billion fraud annually:

• Over £900 million from housing tenancy fraud – enough to build 6000 council homes

• In context its around one third of the £6 billion savings that councils need to find

• Council Tax fraud figures have increased from £90m to £130m

Local government can save money by tackling fraud and error:

• Ealing Council project savings of £7 million from SPD fraud work

• West Berkshire yielded £4m over four years by reviewing

discounts and penalties for Council Tax

Government has a responsibility to tackle fraud and error to:

• Increase public confidence that taxpayers money is protected

• Protect from reputational damage

7 Fighting Fraud Locally- official NFA / Board Slides

Fighting Fraud Locally

• First sector-led strategy developed under Fighting Fraud Together

• Role of NFA has been to coordinate and catalyse action and bring partners together

• Content arises from practitioners and ‘experts’ in the sector

• Needs to be ‘owned’ and implemented by local government

• Supported by central government and with collaboration from the private sector

• NFA will provide tools to help local authorities address fraud risks

• Work on FFL needs to be ‘fit for purpose’

Fighting Fraud Locally- official NFA /

Board Slides

Why Fighting Fraud Locally and Why Now?

The Context

• Changes in the way services are

delivered

• The need to make savings

• Changes to the regulatory landscape

• More motivated offenders

A New Partnership

• Between local authorities

• Between local authorities and central government

• Between local authorities and law enforcement

A New Approach

• Acknowledging fraud and the savings that can be made

• A new emphasis on prevention

• Strengthening the enforcement response

Collaboration

• Adopting and implementing good practice

• Sharing data and information

• Sharing services

Fighting Fraud Locally- official NFA /

Board Slides

A Strategy by Local Government for Local Government

Oversight board members 2011:

• Stephen Hughes, CEO, Birmingham City Council

• Katherine Kerswell, CEO, Kent County Council

• Ian O’Donnell, Exec Director, London Borough Ealing

• Stephen Jones & Andrew Hughes, Local Government Association

• Andrew Hyatt, Head of Fraud, Royal Borough of Kensington & Chelsea

• Kevin Stewart, Institute of Revenues Rating & Valuation

• Debbie Gibbons, Rushmoor Council and LAIOG

• David Clayton, Chartered Institute of Housing

• Greg Marks, CIPFA

Fighting Fraud Locally- official NFA /

Board Slides

A Strategy by Local Government for Local Government

Widespread engagement

• Over 400 LA stakeholders

• 11 workshops

• Working-level advisory board

Free Support from the Private Sector

• Deloitte, research

• Grant Thornton, research

• RSM Tenon, Powers & Penalties

• PKF , Resilience tool

• Chris Corney, Solicitor, Powers& Penalties

• Prof. Alan Doig, research

• BDO, resources

Fighting Fraud Locally- official NFA /

Board Slides

Fighting Fraud Locally Board 2012-2015

The Board Members Chair : Ian O’Donnell, Executive Director of Corporate

Resources and representing Local Authority Treasurers Local Authorities: Colin Sharpe, Director of Finance and representing Local

Authority Treasurers Stephen Hughes, Advisor and representing Chief Executives LGA : Warren Leigh, Policy Manager NFA: Rachael Tiffen, Deputy Director DCLG: Shela Hussein, Deputy Director RSM Tenon John Baker Deloitte Mike Clarkson Grant Thornton Les Dobie Secretariat: The NFA will provide a secretariat, day to day support and act

as a contact point

Fighting Fraud Locally- official NFA /

Board Slides

Governance

• Fighting Fraud Locally Strategic Board was established in February 2012 to co-ordinate and drive delivery of programme to fight fraud locally.

• The Board consists of members from local and central government, engaging closely with stakeholders from local government, central government and the private sector

• The Board meets every 2 months to review:

– Delivery Plan and progress on recommendations

– Allocate recommendations

– Review communications and engagement

Fighting Fraud Locally- official NFA /

Board Slides

Advice and Support

The Board has requested a number of individuals and organisations provide support to the Board as and when requested on specific matters.

Cliff Dalton – CIPFA

Kevin Stewart – IRRV

John Rosenbloom – Manchester CC and Chair of Accreditation Board

Howard Shaw – ICFS

Andy Hyatt – Royal Borough of Kensington and Chelsea

James Flannery – Gravesham Council

Simon Lane – London Borough of Brent

John Baker – RSM Tenon

Les Dobie – Grant Thornton

LBFIG and LAIOG

The Audit Commission

Stephen Hughes – remains on the Board as CE Advisor

Fighting Fraud Locally- official NFA /

Board Slides

Pursue

Being stronger in punishing

fraud and recovering losses

•Assessing and understanding

fraud risks

•Committing support and

resource to tackling fraud

•Maintaining a robust anti-fraud

response

Prevent

Preventing and detecting more

fraud

Acknowledge

Acknowledging and

understanding fraud risks

Local government will be better able to protect itself from fraud and will

provide a more effective fraud response.

•Making better use of

information and technology

•Enhancing fraud controls and

processes

•Developing a more effective

anti-fraud culture

•Prioritising fraud recovery and

the use of civil sanctions

•Developing capability and

capacity to punish fraudsters

•Collaborating with law

enforcement

A Strategy to Tackle Fraud Locally

Fighting Fraud Locally- official NFA /

Board Slides

The Fraud Loss Profile

Tools: Compendium and others

Tools: NFA Good practice

Free E-learning

• NFA and Deloitte e learning

tool, basic module

• Disk to every CE in July 2012

CIPFA Benchmarking

NFA Toolkit : Publicity

• “Spot It – Stop It” The internal toolkit is based upon the NFA’s current Central government campaign,

• ‘Spot the Cheater’. the external toolkit has been tailored from a successful campaign at City of Stoke-on-Trent Council

• These have been tailored for use by other authorities and the campaign packs include a number of materials from which to pick and choose what they want to use.

NFA Toolkit

In the toolkits are:

– Templates for Committee Reports on the campaign

– Letter templates to portfolio holders explaining the campaign

– Briefings for CEOs

– Posters, leaflets and other publicity (The tri-borough may be using some of the imagery to produce magnetic notices for housing vans)

– A training pack with Powerpoint slides and speaking notes

– A staff induction pack with slides

– Template briefings

– Intranet advice

– Campaign summary for stakeholders and owners

– A campaign project plan

– A senior staff bulletin

Insider Fraud

• 1st guidance on LA insider fraud

• Key part of Fighting Fraud Locally

• An essential part of a robust counter fraud culture

The Achievements

Stoke City Council

• A joint-working initiative by Stoke City Council has seen a return of 54 recovered properties, 3 prosecutions and £250,000 of fraudulently claimed benefits in its first 12 months alone.

• SPOT THE CHEATER

The Achievements

• Kent County Council provides

a nationally accessible

framework agreement for the

supply and delivery of Credit

Referencing and Fraud

Investigation Services.

• The Agreement is divided into 4 Lots: • • Lot 1 - Company Credit Checks • Lot 2 – Person Checks • Lot 3 – Employee Checks • Lot 4 – Debt Prioritisation and Collection Services

• This Agreement will be accessible until 16th September

2016. For a copy of the User Guide and to gain access to this framework contact Commercial Services at psg@kent.gov.uk or telephone 01622 605794 and quote the Reference Number C12077.

The Achievements

Grant Thornton:

• The Fighting Fraud Locally Checklist

• Expenses Fraud Top Ten

The Achievements

NFA Pathfinder: Ealing SNAP Internal matching

• 1563 accounts have had the single person discount removed.

• 1851 accounts where the discount is currently undergoing challenge

• Backdated account adjustments of £1,196,309

• Annual value of discounts removed £484,855

Additional Untaxed Properties

• 213 additional previously untaxed properties

• 48 more currently awaiting inspection

• Backdated account billing of £120,949

• Annual charge list increase of £104,192

Total Additional Income Generated (To Date)

• Backdated Adjustments £1,317,258

• Additional Annual Income £589,047

The Achievements

• NFA/FFL Pathfinder

• West London Track a Fraudster/ the London Hub.

• Early individual results

The Achievements

London Borough of Croydon

Joint investigation with UKBA Mr Mayomi and Ms Ubiribo

• 10 Theft Act offences, 4 Fraud Act offences and 2 immigration offences. On 13/08/10

she was sentenced to 12 months in prison suspended for 2 years, she had to

complete 200 hours

• 9 Theft Act offences, 1 Fraud Act offence, 2 immigration offences, 2 offences under

the Criminal Justice Act and 1 perjury offence. On 13/08/10 he was sentenced to 30

months in prison.

• Mayomi has to pay £1,197,743.54 in a confiscation order. This is to be paid by him by

14/03/13. If he fails to pay he goes to prison for 6 years. While he is in prison interest

is accumulating on his debt. Once he is released he still has to pay the confiscation

order plus interest.

• On 20/07/12 Ubiribo was told to pay £9,357.42 in a confiscation order.

• Eventually Croydon Council should receive around £400,000 as a share of this

confiscation.

The Achievements

Slough Borough

• RTB fraud : The purchase price was given as £185,000 with an RTB discount of £38,000.

• Savings in excess of 30k, fraudulently obtained mortgage

1. Nasim Tariq

• a. Confiscation Order: £6,276.95p.

• b. Compensation payable £5,058.48p. c. Costs awarded of £3,500.

• d. 3 months default sentence and 28 days TTP. Consent transfers to HMCS signed to the value of £6,276.95.

• e. £3,500 costs award.

2. Mohammed Tariq

• a. Confiscation Order: £34,802.35

• b. Compensation payable £34,802.35

• c. No costs

• d. 15 months default sentence and 6 months TTP. Consent transfers to HMCS signed to the value of £19, 279.15.

• e. Outstanding: £15,523.32

The total compensation through confiscation payable to SBC is £39860.83

The Achievements

The Tri-Borough Pilot: • On 8th November, the TriBorough (the Royal

Borough of Kensington and Chelsea,

Hammersmith and Fulham, and

Westminster) launched a fraud awareness

campaign which covers all areas of fraud,

but with a specific Housing Fraud element

and involved Registered Providers including

Peabody Housing Association.

• The speakers at the event included:

Baroness Hanham, Sir Merrick Cockell,

Stephen Harrison, Ian O’Donnell, Joe

Joseph and Councillor Lindsay Hall.

The Achievements

NFA Pathfinder:

• A collaboration between Enfield

Council’s Counter Fraud Team

and Enfield Police Payback Team

resulted in several sanctions,

including the prosecution and

jailing of a person for benefit fraud

in Enfield and Waltham Forest

resulting in a confiscation order for

£543,000, of which Enfield

received £48,000.

FFL Conference 2012

Whats to come?

• West London ‘Track a Fraudster’ – the London Hub

• Whistleblowing pilot

• NFA has around pilots Counties and surrounding Districts looking at

hubs/sharing counter fraud expertise

• Working with one London LA to implement Fighting Fraud Locally

• New risks: Business Rates, Schools, Council Tax Support, Procurement

,Social Fund, Grants and Personal Budgets

• Powers and Penalties 2

Any questions?