Agenda Item No
The Vale of Glamorgan Council
Audit Committee 25th February 2013
Report of the Head of Accountancy and Resource Management
Single Fraud Investigation Service (SFIS)
Purpose of the Report
To inform members of progress with the Single Fraud Investigation
1. That the
report is noted, and further reports are presented to the Audit
Committee in order to provide updates on the progress of the Single
Fraud Investigation Service.
Reason for the Recommendation
1. To be informed of the progress of
Single Fraud Investigation Service and the likely effect on service
The Department for Work and Pensions (DWP) and Her Majesty's
Revenues and Customs (HMRC) have produced a strategy for 'Tackling
Fraud and Error in Government'. The aim is to reduce fraud and
error overpayments in the Welfare System by one quarter, £1.4
billion, by March 2015.
A key part of this strategy is the launch of the Single Fraud
Investigation Service (SFIS) to provide for investigation covering
the totality of welfare benefit fraud. Investigators will have
powers to investigate all social security benefit, housing benefit
and tax credit claims.
In April 2013, Council Tax Benefit will be replaced by the Council
Tax Reduction Scheme. This new scheme will be administered
directly by the Council and will not be included under the SFIS
remit. Investigation of fraud involving this scheme will be
the responsibility of the Council and legislation is in place to
Relevant Issues and Options
The formation of SFIS will bring together expertise from DWP, HMRC
and local authorities with the aim of all working together under a
single policy and set of operational procedures.
A consultation was conducted in September 2011 among the
participants and a decision was made that in the short term
Investigators would stay with their original employing
organisation, retaining their terms and conditions, while working
under one banner of SFIS with the planned start date of April
However, against a background of wider welfare reform it has not
been possible to implement SFIS as quickly as planned. The Welfare
Reform Act 2012, will see the introduction of Universal Credit as a
replacement for Income Support, Jobseekers Allowance, Working Tax
Credits, Child Tax Credits, Employment Support Allowance and
A Household Benefit Cap will restrict the maximum amount of benefit
that can be received by a family; An accommodation size restriction
will ensure customers are only paid for the size accommodation they
need; Payments will change to monthly from weekly to encourage
budgeting; Rent payments will no longer be paid directly to
landlords but instead to the tenants; Disability Living Allowance
will change to Personal Independence Payments with a much stricter
assessment criteria; Council Tax Benefit will be replaced by a
Local Council Tax Reduction Scheme: Pension Credits will have an
additional Housing and Child premium element.
All of these changes are individually large projects and this is
the biggest reform to Welfare since it began. The majority of these
Welfare reforms are either at pilot stage or due to start being
phased in within the next year and SFIS is a vital part of the
10. There are currently 4
pilots underway for SFIS around the UK. These are being used to
test different ways of working, a single investigation policy and
the new legislation. A single management board should be in place
by April 2013 and this will guide the partnership approach.
LA/DWP/HMRC Investigators will be encouraged to work together and
their work will be conducted under the SFIS branding.
11. The pilots will be
constantly evaluated and new ones added to ensure that new
processes, emerging IT systems and the legislation are tested
thoroughly and this should allow for a planned rollout of SFIS to
all participants from April 2014 to March 2015.
12. The SFIS project is
drawing expertise from DWP, HMRC and local authorities and as a
result; a Group Auditor based within the Internal Audit Section's
HB/CTB Fraud Investigation Team is to be seconded for 6 months to
the project team. This secondment will take effect from 4th
Resource Implications (Financial and Employment)
13. Currently Auditors
tasked with Housing Benefit investigation are continuing to work as
usual. When SFIS is introduced the Council will retain employment
responsibilities until such time as SFIS becomes an organisation
separate from DWP/HMRC and the Local Authority. There is currently
no timetable for this to happen.
Legal Implications (to Include Human Rights Implications)
14. The formation of SFIS
is under statutory powers introduced by the Welfare Reform Act
Crime and Disorder Implications
15. Participation in this
initiative will assist the Council in protecting the public money
it looks after.
16. 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
17. None as a direct
consequence of this report.
18. The work of Internal
Audit is intended to assist in the achievement of all corporate and
Policy Framework and Budget
19. The proposals in this
report do not contravene the policy framework or budget.
Consultation (including Ward Member Consultation)
20. No further
consultation is proposed.
Relevant Scrutiny Committee
Helen Smith - Principal Auditor Tel: 01656
External Audit Manager - Grant Thornton UK
Alan Jenkins - Head of Accountancy &