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Fraud is by no means a new challenge for the public sector, but as budgets tighten and each pound is forced to work harder, the problem is magnified.
According to the Annual Fraud Indicator 2013, which provided the latest set of government sanctioned estimates, fraud costs the public sector at least £20.6bn annually, with local government fraud accounting for £2.1bn of this. Our own annual survey (the CIPFA Fraud and Corruption Tracker) found that last year across local government, more than 75,000 frauds had been detected or prevented, representing a total value of £336.2m.
Recognising the scale of the problem, CIPFA is working with London boroughs and a number of partners to fight back by analysing multi datasets in order to better detect fraud cases.
The London Counter Fraud Hub is a data-sharing and analytics initiative which is set to provide a genuine step change in reducing fraud and returning funds where they are needed most.
Led by Ealing Council and London Councils and run by CIPFA, together with a number of partners, the Hub was launched back in June 2017, with a pilot phase that included Ealing, Camden, Islington and Croydon. The pilot has been running for the past six months and during this time the Hub team has been testing the concept in three areas: single-person discount council tax (SPD), housing tenancy and business rates, before moving to a longer list of other fraud types.
The preliminary results from the pilot show that for each of the three fraud types that are being tested, the analytics has generated a higher number of alerts than originally anticipated. For example, in the case of SPD, the expectation was in the region of 900 alerts, whereas there have been more than 5,000 alerts generated by the Hub across the four boroughs. The detection rate, which has moved from the current industry benchmark of 4% to over 55% is impressive, but it is just the start of a constant improvement process. For some councils, this is adequate to move to a fully automated process for SPD for instance, whereas for others there will still be more work to do through industrialisation and indeed even after the Hub goes live in April.
The results are encouraging, and while the pilot will continue the testing of further datasets, the Hub team is preparing the way to begin bringing all London boroughs into the programme.
If you'd like to get in touch about the Hub, please contact: firstname.lastname@example.org.