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Councils 'should use data hubs to fight fraud'



New DCLG guidance points to potential for data matching and analytics while minister highlights smart phone apps and data maps

Local authorities should aim to make more use of data hubs and analytics in fighting fraud, according to newly published advice from the Department for Communities and Local Government (DCLG).

It includes the measure in a strategy document, Fighting Fraud and Corruption Locally, which has been prepared with the support of the Counter Fraud centre of the Chartered Institute for Public Finance and Accountancy (Cipfa). Other recommendations include the use of identity checking technology and mobile apps.

The strategy says that data hubs provide a “huge opportunity” to support counter-fraud work, can feed into the efforts of the National Crime Agency and Home Office, and connect to other hubs.

It highlights Birmingham City Council's use of its data warehouse to identify fraud through mining and matching data, saying that its capabilities have been greatly increased by it holding data from neighbouring councils and partner organisations. This has now been embedded into its housing services so its staff can spot potential frauds in advance, and provides assurance that tenancies are only going to people who really need them.

Beyond NFI

Councils can go beyond the periodic data matching exercise under the National Fraud Initiative and take advantage of new technology and a wider appetite among other organisations to collaborate on the issue.

This could be accompanied by using technology to check documents used in verifying an identity, such as passports, which could generate alerts of possible fraud.

The document does, however, acknowledge that council teams have often found it difficult to obtain information from other agencies, or even colleagues, and run instances of being warned off data sharing as it would have been illegal.

It also acknowledges that councils have claimed it has been difficult to obtain funds to fight fraud.

The advice could be frustrating for some local authorities, coming after they received no money for digital initiatives in last November's Spending Review. But Communities Minister Marcus Jones pointed to £35 million having been made available to clamp down on housing tenancy fraud and business rates evasion.

He also highlighted the potential to use smartphone apps, anti-fraud interactive maps and e-learning systems for staff, pointing to existing initiatives by councils.

These include Telford and Wrekin's development of an app for residents to report suspected fraud, which it has made available for other councils to use, and Trafford's creation of data maps to identify areas at increased risk.

Rip off

“We are determined to find, catch and prosecute the fraudsters who rip off councils, denying taxpayers billions of pounds,” Jones said. “Across government we are clamping down on corruption and I'd urge councils to make full use of these suggestions to get tough on fraud.”

According to the 2013 National Fraud Indicator, the biggest losses to councils came from procurement fraud, totalling £876 million. It was followed closely by housing tenancy fraud with £845 million, then payroll with £154 million and council tax with £133 million.

Even the misuse of the Blue Badge scheme for disabled parking permits was estimated to have cost councils £46 million.

Image from GOV.UK, Open Government Licence v3.0

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