Agenda item

The Deputy Chief Executive and Section 151 Officer presented the Counter Fraud Annual Report 2023/24.  As part of the Committee’s terms of reference it was a requirement to produce an annual report on the counter fraud arrangements in place and the activities undertaken. The report documented the work undertaken during 2023/24 and indicated the work that would be undertaken during 2024/25.

The document was split into four broad headings covering:

·       Counter Fraud Risk Assessments

·       Housing Benefit and Council Tax Support Fund

·       Single Person Discount

·       Business Rate Relief – Retail Discount

It was stated that one area of work for the Committee to consider receiving information on was in respect of the risk assessment work carried out by the previous internal auditors RSM, working with senior officers to develop a Fraud Risk Register which had been developed and independently verified.

The document highlighted key theoretical risk areas across the authority around internal controls such as:

·       Segregation of duties

·       Separation of roles and responsibilities

·       External frauds around claimants and inappropriate declarations

The document would help direct future work plans of the internal audit and also senior management.  The information could be used to generate a Heat Map using the RAG status to show where vulnerabilities lie and what measures and processes could be put in place to help strengthened these areas.  Work was still progressing on the document and the Committee would be kept informed of its progress during the year.

Further work was being done in respect of Housing Benefit and Council Tax Support Fund and the potential for fraud vulnerabilities in this area. The council was working closely with the DWP on any referrals and false declaration information.  Members were referred to the table at 4.7 of the report which detailed the Housing Benefits Overpayments made during 2023/24.  There was around a quarter of million pounds of fraud debt that had been identified either through the DWP or whistleblowers.  There was a dedicated officer that was focused solely on this type of work looking at referrals and reclaimants. 

The other area of work was in respect of Single Person Discount (SPD) and this was where a person self-declared that they lived in a property on their own and received a 25% discount on their Council Tax.  This was policed by the individual and it was their responsibility to notify the council of any changes.  This area was open to fraud and the Council had worked with an external provider in March 2024 to review the SPD which had resulted in the removal of 573 from the Council Tax account and generated revenue of £75,611.  The review would be complete in August 2024 and it was proposed that a rolling review rather than an annual review be put in place and that the analysis of further options would be explored including the use of a fraud referral service to identify historic cases for revenue collection and options to pursue sanctions, including prosecution.  The use of a fraud referral service provided all the information required to demonstrate strong grounds to challenge those claimants who appear to have deliberately lied to maintain their discount or exemption and those who had not declared appropriately were open to a £70 fine.

The other area where fraud work had been undertaken was in respect of the Business Rate Relief in respect of the retail, hospital and leisure sector post the Covid pandemic.  The Chancellor had announced a new business rates relief scheme for retail, hospitality and leisure properties for 2023/24 with a 75% relief, up to a cash cap of £110,000 per business.   The Council had applied the relief when the annual business rates bill had been raised in March 2023.  Included in the bill was a letter requesting the ratepayer to complete an on-line form either opting-in or opting-out of the relief scheme.  For those who had opted-out or did not complete the form their relief was removed and amended bills issued on 1 May 2023.  As of 31 March 2024, the Council had awarded business rates relief in the sum of £3,625,161.

Comments were made in respect of the banding areas where most Council Tax fraud took place, housing and planning allocations, benefit overpayments, Single Persons Discounts, the effect of Universal Credit on benefits to which the Deputy Chief Executive and Section 151 Officer responded.

It was proposed, seconded and AGREED to approve the Counter Fraud Annual Report for 2023/24.

Decision

That the Governance and Audit Committee approve the Counter Fraud Annual Report for 2023/24.