Five London boroughs have launched a major crackdown on criminals defrauding London's councils out of millions of pounds.
Camden, Ealing, Islington, Croydon and Southwark have begun piloting the London Counter Fraud Hub, a partnership between all boroughs in the capital to better target those responsible for unpaid council tax, illegal property letting and unpaid business rates.
The hub, which is run with data analytics provided by the Chartered Institute of Public Finance and Accountancy (CIPFA) has the potential to save London tax payers £60 million a year on average.
The most recent estimates suggest that councils are defrauded of £2.1 billion each year nationwide, including £133 million in council tax discount fraud. Last year, London councils detected fraud to the value of nearly £100 million 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.
Those responsible for fraud will face consequences ranging from payment orders to lengthy prison sentences.
Edward Lord, OBE, Chair of London Councils’ Capital Ambition Board, said: “It is vital that we find innovative ways to ensure councils are not losing money as a result of fraud.
“The five boroughs piloting the hub will have access to the most sophisticated data analytics to identify potential criminals, and seeing the hub in action will allow us to build a clear picture of the situation, take swift action and ensure money lost to fraud is recouped to be spent on public services in Camden, Ealing, Islington, Southwark and Croydon.
“Estimates suggest councils across the country are defrauded to the tune of £2.1bn every year. Once operating across all boroughs, the hub will help bring down this worrying total and will make uncovering and sanctioning those responsible easier.”
Minister for London Gavin Barwell said: “Across the country, fraudsters are robbing hard-working taxpayers of £2.1billion a year – money that could be invested in local services.
“Councils across the capital have been taking steps on this important issue, so I’m pleased to see these five boroughs coming together to make a concerted effort to tackle this.”
Rob Whiteman, Chief Executive of CIPFA, said: “In the fight against fraud and corruption, working closely with others is essential and the London Counter Fraud Hub, with it wide network of collaborators and contributors, is one of the most advanced counter fraud programmes in the public sector.”
Notes to editors
- For more information visit www.cipfa.org/london-counter-fraud-hub
- The contract with CIPFA, who will provide data analytics, will operate on a payment by results basis. The pilot study is underway and the full hub activities will launch later this year.
- The initiative is supported by London Councils’ London Ventures programme which provides local authorities with access innovative products and services to improve public service outcomes for London.
- The procurement was originated and led by Ealing Council, supported by a grant from 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 amongst 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 last year. 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): www.cipfa.org/services/counter-fraud-centre/fraud-and-corruption-tracker