Prevent and detect: new fraud strategy launched for local authorities
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The new counter fraud and corruption strategy for local government, Fighting Fraud and Corruption Locally, has been launched today (23 March, 2016). It sets out a vision in which local authorities are working together across boundaries and using technology to prevent and detect more fraud.
The strategy has been developed for local authorities by local authorities in partnership with DCLG, the LGA and other stakeholders. The work of researching and producing the strategy was carried out by the CIPFA Counter Fraud Centre. The new strategy sets out to address the fraud concerns raised by local authorities during extensive research and introduces new anti-corruption measures for local authorities, integrating with the government’s Anti-Corruption Plan.
Threat
The last comprehensive study by the National Fraud Authority, published in 2013, estimated that fraud costs local authorities £2.1bn a year.
Local authorities are under constant attack from fraudsters who are constantly revising and sharpening their methods and finding new ways to steal from the public purse.
To address this threat, the new strategy says, local authorities need to raise their game. Marcus Jones MP, the minister for local government, said: “The risks are clear, councils must ensure they are active in looking for and identifying fraud and embedding a counter fraud culture at the heart of their organisation.”
Doing so will not be easy in the current context of fast and far-reaching change. Local authorities are facing major funding reductions due to deficit reduction in tandem with increased demand for services, the challenge of making devolution and inter-sectoral integration work, and the need to assimilate significant government policy changes concerning key local authority areas of responsibility such as education and housing.
The counter fraud landscape has changed too; with local authority housing benefit counter fraud staff having transferred to the Department for Work and Pension’s Single Fraud Investigation Service, and the arrival upon the scene of new partners such as the National Crime Agency, the National Audit Office, and the CIPFA Counter Fraud Centre, which has agreed to take on the hosting and further development of Fighting Fraud and Corruption Locally.
The strategy maintains that in order to fight fraud effectively, local authorities should continue to follow the principles developed in Fighting Fraud Locally 2011 of “acknowledge, prevent, pursue”. This approach has delivered considerable success.
Response
However, local authorities now need to respond to an increased threat and the strategy sets out ways in which local authorities can further develop and enhance their counter fraud activity by ensuring that it is comprehensive and effective and by focusing on the key changes that will make the most difference.
Local authorities are asked to consider their counter fraud performance against six themes that emerged from the research: culture, capability, capacity, competence, communication and collaboration.
A companion to the strategy has been produced for practitioners with a section on each of these themes, together with information on fraud risks, good practice and case studies.
This strategy also identifies the areas of focus that will make the most difference to local authorities’ counter-fraud efforts. These are:
- Leadership
- Assessing and understanding the scope of fraud and corruption risks
- Making the business case
- Using resources more effectively
- Collaborating to improve
- Using technology to tackle fraud
- Tackling corruption
Described as a blueprint for a tougher response, the strategy is aimed at council leaders, chief executives, finance directors, and all those charged with governance in local authorities. It was produced as part of the Fighting Fraud and Corruption Locally initiative, a partnership between local authorities and key stakeholders.
The strategy can be found here.
Ian O’Donnell is the executive director of corporate resources at Ealing Council and is the chairman of the Fighting Fraud & Corruption Locally Board.
