Agenda item

Report of the Assistant Director for Corporate Governance, detailing the work undertaken by the Counter-Fraud Team in the quarter ending 30 September 2016 and focussing on details of pro-active and reactive investigative work undertaken relating to fraud and/or irregularities – work undertaken by the in-house counter Fraud Team.

The Committee considered the report on the work undertaken by the Counter Fraud Team in the quarter ending 30 September 2016, which covered details of proactive and reactive investigative work undertaken by the in-house Counter Fraud Team. It was noted that two whistleblowing referrals had been received during quarter 2, and that in relation to tenancy fraud 21 properties had been recovered to date in 2016/17, with 85 investigations ongoing, of which court proceedings were underway for 39. Also during this quarter, one Temporary Accommodation property had been recovered, three fraudulent housing applications had been prevented and 22 Right to Buy applications had been withdrawn or refused. It was noted that the Council had been supporting other local authorities with their own work in this area, and had recently presented at the National Anti-Fraud Network Annual Summit.

In response to a question from the Committee regarding how the targets for tenancy fraud and Right to Buy fraudulent applications were set, it was reported that the targets were based on a former estimate of the Audit Commission that 4-6% of total tenancies could be fraudulent, and the application of that estimate to the resources available. On average, the Council recovered 40 to 60 properties per year, but it was noted that where prosecutions were undertaken jointly with other local authorities it could take several years to complete the legal process and recover the keys to a property. The Council previously received funding from the DCLG for additional investigators in this area, and during that period the targets had increased, however the targets had lowered again since this funding had ceased.

The Committee asked how the Council obtained information relating to potential tenancy fraud, and it was reported that there were several different data sources, including data matching with credit reference agencies, looking at people who paid their rent from outside the borough, intelligence from within the Council and working with external agencies, the National Fraud Initiative and data matching with Housing Benefits records. A recent project had been for investigators to attend Gas Safety Check appointments in temporary accommodation units, and work was taking place to train tenancy management officers to look for tell-tale indications of fraud when undertaking routine checks. The Committee asked whether there was a way of deterring people from making fraudulent applications in the first place; it was reported that the Council tried to interview applicants at an early stage as possible and to ask questions that might make them think about the implications of proceeding with an application they knew to be fraudulent, word of mouth reports that all applications were investigated thoroughly was also a potential way to deter people and it was noted that some applications were withdrawn after being submitted.

The Committee asked about the Right to Buy discount that was available, and also the nature of the fraud identified. It was reported the discount was stepped, with discounts available up to a maximum of £103k after 5 years, to be reduced to 3 years shortly. It was noted that fraudulent behaviour was not only on the part of applicants, but there were also examples of mortgage brokers, financial advisors and solicitors being involved in fraudulent applications. The Council was keen to identify potential fraud cases not only to prevent homes being sold at a discount illegally, but to protect longstanding Council tenants who may be at risk of losing their homes.

In response to a question from the Committee it was confirmed that a telephone number, email address and PO Box for contacting the Council regarding suspected fraud was advertised on the Council’s website, and that details were also being printed on the back of Argos receipts in Wood Green, Harringay and Tottenham Hale as a targeted project. The Committee suggested that consideration be given to printing information about fraud prevention on the Housing Benefits form on an annual basis.

RESOLVED

That the Committee note the counter-fraud work completed in the quarter.