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London Councils sign CIPFA for counter-fraud hub

10/08/16

Public sector accountancy organisation and BAE Systems to provide anti-fraud analytics aimed at saving £60 million per year

Plans for a London Counter Fraud Hub have moved forward with a deal between London Councils, the cross-party organisation for the city’s local authorities, and the Chartered Institute for Public Finance and Accountancy (CIPFA) for the latter to provide the data analytics.

London_arial_shot_croppedThey have a signed a nine-year contract, subject to a review after a six-month proof of concept pilot, in which the public sector accountancy organisation will be paid by results in reducing fraud against the capital’s boroughs.

The pilot is due to begin in the autumn with the full launch scheduled for early next year.

BAE Systems will provide the analytics and case management capabilities, supported by organisations including fraud prevention group Cifas and Ordnance Survey.

Ealing Council, which led the procurement, is to host the contract management team, which will be funded through top slicing the proceeds from the operation of the hub. There will be no up-front costs for the councils, and there have been projections that it could save up to £60 million per year in preventing the avoidance of council tax and business rates, illegal property letting and fraudulent blue badge applications.

Ending scams

Edward Lord, chair of London Councils’ Capital Ambition Board, said: "The London Counter Fraud Hub will now give the London boroughs access to the most sophisticated data analytics to identify potential fraudsters and ensure that money lost to scams ends up in its rightful place - funding vital public services.

"The hub will continue to consult regularly with the information commissioner to ensure that its operations meet the most rigorous requirements of data privacy and protection and build and maintain public trust."

CIPFA’s Counter Fraud Centre will provide services including a fraud risk register and a London-wide whistleblowing service, and will take charge of investigations supported by accountancy firms Mazars and Moore Stephens.

All 32 London boroughs and the City of London have signed a memorandum of understanding (MoU) committing to use the hub, and the project has been supported by a £430,000 grant from the Department for Communities and Local Government.

London Councils said that recent estimates suggest that councils are defrauded of £2.1 billion per year nationwide. Last year the capital’s local authorities detected fraud valued at £102 million, with £74.5 million coming from housing fraud.

Automate response

Ian O’Donnell, executive director of corporate resources at Ealing and one of the leaders of the project, told the recent Digital Authority Forum that the analytics should be able to automate the response to the simple instances of fraud, while the investigations team takes on the more complex cases.

“This is a test to see whether councils can work together and share their data in a sensible way,” he said, adding that the MoU has been an important element in making this possible, and that it lays the ground for preventing fraud through measures such as establishing people’s identities, and could provide commercial opportunities through the extrapolation of trends.

He also predicted that there could be big savings in detecting fraud around business rates.

 Picture by Mai-Linh Doan, CC Attribution Share-Alike 2.0 France through Wikimedia

 

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