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Plans to turn up the heat on criminals defrauding London’s councils have taken a major step forward with the appointment of the Chartered Institute of Public Finance and Accountancy (CIPFA) to provide data analytics for the London Counter Fraud Hub.
The London Counter Fraud Hub is a partnership between all the London boroughs to better target fraudsters who attempt to con councils out of millions of pounds a year in unpaid council tax, illegal property letting and unpaid business rates. The hub has potential to save London taxpayers £60m a year over the nine-year contract period.
Edward Lord OBE, Chair of London Councils’ Capital Ambition Board, said: “As councils struggle with huge reductions to their budgets, it is imperative that we use new ways to root out fraud across the capital.
“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.”
Rob Whiteman, Chief Executive of CIPFA, said: “The London Counter Fraud Hub is one of the most advanced counter fraud programmes in the public sector. We are very pleased to have been awarded this contract in a groundbreaking area of fraud prevention and looking forward to playing our part in protecting the public purse.”
The most recent estimates suggest that councils are defrauded of £2.1bn each year nationwide, including £133m in council tax discount fraud. Last year, London councils detected fraud to the value of £102m with housing frauds accounting for £74.5m of the total.
The initiative will help both prevent and uncover fraud within boroughs and across boundaries between boroughs, with perpetrators facing sanctions ranging from payment orders to lengthy prison sentences.
Minister for London Gavin Barwell said: “We’re determined to help councils crack down on fraudsters that cost councils more than £2bn a year, robbing the taxpayer of vital public services. That’s why we have backed councils with £16m funding for 60 projects across the country to tackle this problem.
“Today’s counter-fraud hub is one of the largest of these and will help the capital’s boroughs more effectively catch and prosecute fraudsters.”
Notes to Editors
The contract with CIPFA will operate on a payment by results basis. A pilot phase will get underway in autumn 2016, with the hub launching its full operations in early 2017.
The procurement was originated and led by Ealing Council, supported by a grant from the DCLG’s Counter Fraud Fund. Project management and administration was provided by EY under contract to Ealing Council.
The CIPFA Counter Fraud Centre was established in 2014 and has become the first professional body to offer membership support to counter-fraud professionals, alongside a range of specialist training and services, including development of the Fighting Fraud and Corruption Locally strategy. For further information, please see: www.cipfa.org/services/counter-fraud-centre
The CIPFA Counter Fraud Centre will support collaboration between London fraud teams by providing services such as a fraud risk register for the capital and a London wide whistleblowing service, with investigations supplemented by accountancy firms Mazars and Moore Stephens. Advanced analytics software and case management will be supplied by subcontractors BAE Systems and further support provided by industry experts Cifas and the Ordnance Survey among others.
Technology enabling fraud to be detected from significant amounts of seemingly unrelated data is already widely used in the insurance industry.
Every borough has an internal fraud team, which together detected £102m in fraud in 2015. This hub will mark a step change in data analytics between those teams, ensuring that fraudsters that have previously gone undetected are caught.
Local government fraud statistics are published in the annual CIPFA Fraud and Corruption Tracker (CfaCT).
The table below uses data from the CFaCT survey to provide a detailed breakdown of types and values of fraud detected by London councils:
Types of fraud
% of the total
Council Tax Frauds
Disabled Parking Concession
No Recourse to Public Founds
Other Types of Fraud
The initiative is supported by London Councils’ London Ventures programme which fosters innovation and collaboration between boroughs to deliver value for money for Londoners.