Agenda item

Counter Fraud Unit (see recommendations)

Kate Seeley, from the Counter Fraud Unit (CFU) introduced the update which summarised the activity being undertaken by the CFU and aimed to provide assurance over the counter fraud activities of the Council.  The unit had been proactively looking at Housing related fraud at both Cheltenham and Tewkesbury, would soon be undertaking work on behalf Gloucestershire County Council in relation to Blue Badge fraud and the unit were in the process of being contracted to undertake reactive work on behalf of Ubico.  A lot of focus had been given to redrafting and aligning policies and compiling the business case for a permanent CFU.

The Chief Finance Officer introduced the business case. In February 2015, Audit Cotswolds successfully bid for DCLG funding to accelerate the development of a dedicated Counter Fraud unit for Gloucestershire and West Oxfordshire.  The funding was a one-off payment and the business case being considered translated the funded project into a permanent service model that was fully self-sufficient, whilst continuing to manage and utilise the DCLG fund to set-up the unit.  Feasibility studies undertaken in 2015-16 and 2016-17 showed that the unit could expect to generate revenue and provide risk assurance and the business case argued that the benefits of a counter fraud unit would outweigh the costs of setting up and operating the unit.  Of the options set out in the business case, all would generate a guaranteed saving, though this saving was obviously smaller in relation to Options 2 and 3.  Members were reminded that with transparency regulations, there was a requirement for authorities to publicise the number of Counter Fraud Officers it employed.  Members would be aware that Council tax was set in February each year, though houses continued to be built during this time, which generated a Collection Fund Surplus, which could be distributed equitably between the District, County and Police.  This was estimated at £40k but had instead generated almost £100k this year and was being estimated at £120k next year, though this obviously could not be guaranteed. 

The following responses were given to member questions:

·      The CFU have previously been involved in proceeds of crime in relation to Housing Benefit cases, and the CFU would be looking at whether this was something that could be pursued in other areas and particularly in terms of Planning Enforcement on businesses, as this would generate a revenue stream.

·      Members were assured that processes were in place to detect fraud before it occurred and the benefit of the CFU was that information relating to attempted fraud could be shared across a wider area.   

·      £100k of the set-up cost was for new software.    

·      The Senior Finance Officer would recommend Option 3 but the other 7 Council’s would need to agree to this.  He therefore suggested that Option 2, which 3 partners had already signed-up to, with a note that the council was open to Option 3, if the other councils also preferred this option.

·      The software is able to   data matching across authorities but could also be used as a standalone system for each authority if data matching was not permitted, by legislation, across authorities.

The committee acknowledged the benefits of the CFU, not least that its very existence could act as a deterrent.  Members were minded to recommend Option 3, but given the need for all council’s to sign-up to this, would instead recommend that Cabinet accept Option 2 but note that Option 3 was their preference. 

Upon a vote it was unanimously

RESOLVED that:

1.    The project summary be noted.

2.    Having considered the business case, Cabinet be recommended to approve Option 2 with a note that Option 3 was the preferred option.