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

1.             To inform members of progress with the Single Fraud Investigation Service (SFIS)


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 provision.


2.             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.

3.             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.

4.             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 allow this.  

Relevant Issues and Options

5.             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.

6.             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 2013.

7.             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 Housing Benefit.

8.             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.

9.             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 overall strategy.

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 March 2013.

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 2012

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 issues)

17.        None as a direct consequence of this report.

Corporate/Service Objectives

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

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

21.        Corporate Resources

Background Papers


Contact Officer

Helen Smith - Principal Auditor Tel: 01656 754901

Officers Consulted

External Audit Manager - Grant Thornton UK LLP

Responsible Officer:

Alan Jenkins - Head of Accountancy & Resource Management