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Agenda Item No 11

 

The Vale of Glamorgan Council

 

Audit Committee - 26th November 2013

 

Report of the Head of Accountancy and Resource Management

 

Housing Benefit & Council Tax Fraud Investigations - Half Year Position 2013/14 Compared Against 2012/13 Out-turn

 

Purpose of the Report

1.         The purpose of the report is to inform the Committee of the activities that have been undertaken in the first six months of this financial year with regard to Housing and Council Tax Benefit Fraud Investigations, and compare this against the 2012/13 activities.

Recommendation

That the Committee is asked to note this report which has been provided for information purposes.

Reason for the Recommendation

To keep the Audit Committee informed.

Background

2.         The Housing and Council Tax Benefit Investigation Team is responsible for the investigation of allegations of Housing and Council Tax Benefit fraud.  Fraud Investigators are required to conduct the whole investigation from the initial allegation being received, to closure of the case and preparation of a sanction, if appropriate. There are three posts on the current staffing structure that undertake this work but currently one investigator post is vacant and the team leader is on secondment with the Department for Work and Pensions (DWP) working on the Single Fraud Investigation Service (SFIS) project. However due to the fall in referrals the remaining investigator has been able to adequately manage the workload alone.

3.         Until the SFIS is agreed and implemented the Vale of Glamorgan Council continues to undertake Housing Benefit and Council Tax fraud investigations. Referrals can be received from a number of sources such as members of the public, the Housing Benefit Section or from the DWP. The Council also continues to receive information via the Housing Benefit Matching Service (HBMS) and the National Fraud Initiative (NFI). However these national initiatives have been in place for a number of years and therefore the quantity and quality of these referrals is decreasing.

Relevant Issues and Options

4.         Due to the success of the national initiatives over the last 8 years, the number of high quality fraud referrals has reduced. Many referrals the Council now receive result in joint investigations with the DWP as claimants are in receipt of DWP benefits as well as Council benefits. Over the past 6 months there have been 31 new investigations opened and undertaken compared to 46 new investigations at the same time last year. During 2012/13 a total number of 100 new investigations were opened. Table 1 illustrates the source of the information received.

 

Table 1 - Source of Referrals for New Cases

Source of Referral

                                        Number

 

2012/13

April to Sept 2012

April to Sept 2013

Anonymous

31

15

13

DWP

24

11

16

Housing Benefit Section

30

17

2

NFI / HBMS

12

0

0

Other Local Authority / Police

3

3

0

Total

100

46

31

 

5.         The investigations are undertaken on the basis of information received or from an allegation made against a claimant or landlord in respect of their housing benefit or council tax benefit claim. The most common allegation received is that of co-habitation which accounted for 42% of the cases opened in 2012/13 and 45% of the cases opened during the first 6 months of this financial year. Working and claiming and undeclared capital or interest account for the majority of the other referrals. As well as new investigations opened during the year, there are also on-going cases opened in previous years, there were 30 of these carried into 2013/14. Therefore, of the 61 cases worked on in the first six months of 2013/14, 32 had been closed by the end of September 2013. The reasons for closing the cases are illustrated in table 2.

 

Table 2 - Reason for Closure

Reasons for Closure

                                     Number

 

2012/13

April to Sept 2012     

April to Sept 2013

All in order

60

27

23

Claimant Error

15

7

0

Proven

22

16

9

Nothing to Investigate

3

2

0

Total

100

52

32

 

6.         It can be seen that 28%, (9 cases) have been closed during 2013/14 with fraud being proven. This is comparable to 2012/13 where the percentage of cases closed as proven was 31% (22 cases). The majority of the closures are as a result of the information being found to be all in order and therefore no fraud or error has been established.

7.         Once a case has been closed and fraud has been proven, the amount of overpayment is calculated by the Benefits Section. A decision is then made, using the Council's Prosecution Policy, as to the most appropriate action. Table 3 illustrates the sanctions that were administered in 2012/13 and for the first 6 months of 2013/14 together with the associated Housing Benefit or Council Tax benefit that has been overpaid and is recoverable.

 

Table 3 - The Number of Sanctions 2012/13 & 2013/14 to date

Sanction

2012/13

Number

Value of HB/CTB O/P

 

April to Sept 2013

Value of HB/CTB O/P

Caution

4

£4,116

0

0

Prosecution - guilty

22

£114,834

6

£35,812

 

8.         It should be noted that 19 of the 22 prosecution cases during 2012/13 were investigated jointly with the DWP, whilst all 6 cases successfully prosecuted during the first 6 months of 2013/14 are also joint cases with the DWP. The value of the recoverable DWP benefit overpayments for these cases was £169,804 in 2012/13 and £40,128 in 2013/14. Of the 2013/14 successful prosecutions, 2 claimants received conditional discharges, 2 received suspended jail sentences, 1 had a community supervision order whilst the other was jailed for 10 weeks.

9.         The information provided throughout this report has illustrated that although the number of referrals have fallen the Council continues to work successfully with the Council's Housing Benefit Section and the DWP. This work continues to result in the recovery of overpaid benefits as well as successful prosecutions where applicable.

Resource Implications (Financial and Employment)

10.      Housing Benefit and Council Tax fraud investigations result in the identification of recoverable overpayments. Although the number of cases has fallen, the number of investigators has also naturally reduced which has been achieved by holding a vacant post and allowing a secondment opportunity.

Sustainability and Climate Change Implications

11.      None directly from this report

Legal Implications (to Include Human Rights Implications)

12.      Local Authorities have a statutory duty to protect public funds they handle, including the administration of benefits. Prosecutions are carried out in accordance with all relevant legislation with prior consideration being given to the requirements of the Human Rights Act.

Crime and Disorder Implications

13.      Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which Internal Audit operate.

Equal Opportunities Implications (to include Welsh Language issues)

14.      None as a direct consequence of this report.

Corporate/Service Objectives

15.      The work of Internal Audit is intended to assist in the achievement of all corporate and service objectives.

Policy Framework and Budget

16.      The proposals in this report do not contravene the policy framework or budget.

Consultation (including Ward Member Consultation)

17.      No further consultation is proposed.

Relevant Scrutiny Committee

18.      Corporate Resources

Background Papers

None

Contact Officer

Helen Smith - Operational Manager - Audit Tel: 01656 754901

Officers Consulted

None

Responsible Officer:

Alan Jenkins - Head of Accountancy & Resource Management

 

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