Agenda item

This report presents the Council’s Interim Counter Fraud Report for the financial year 2025-26.

Darren Armstrong (Deputy Director of Organisational Assurance and Resilience) introduced a report, summarising the counter fraud activity that the Council had undertaken in 2025-26, up to 31 October 2025.  In considering the report the Committee noted:

·            That the report was intended to support the Audit and Standards Advisory Committee in obtaining assurance that the Council had robust and sound counter-fraud arrangements in place,  which included a summary of the activity undertaken by the Counter Fraud team across multiple fraud types (including internal fraud, housing tenancy fraud, external fraud and proactive work undertaken to identify and reduce fraud). The report also fulfilled the requirements of the Local Government Transparency Code 2015, which required local authorities to publish details of their counter-fraud activity.

·            The report followed a format similar to previous versions, and officers noted that the team continued to deliver a robust counter-fraud plan and preventative measures across the fraud types outlined underpinned by the Council’s Anti-Fraud and Bribery and Whistleblowing policies.

·            The details provided in relation to internal fraud which, whilst typically having the fewest referrals, were often more complex in nature as detailed within the “Proactive” section of Appendix 1 of the report.  This included work in relation to whistleblowing referrals and a range of case types such as staff conduct, financial and procedural irregularities.

·            The update provided in relation to Tenancy & Social Housing Fraud (as detailed within section 3.4 and Section 2 of Appendix 1 in the report) with the recovery of social housing properties continuing to have a positive impact on the temporary accommodation budget as a high-priority fraud risk for the Council alongside enhanced fraud prevention activity in relation to tenancy successions applications.

·            The update provided in relation to External Fraud activity cases as detailed within Section 3.5 of Appendix 1 within the report.  This activity included (but was not limited to) fraud cases involving Blue Badge, Direct Payments, Council Tax, Business Rates, insurance, finance, concessionary travel and grant applications.

·            The team continued to undertake a broad range of proactive activity including National Fraud Initiative (NFI) data matching, fraud workshops and targeted operations to support the identification, investigation and reduction in other fraud risk activity across all service areas with further details having been summarised in section 4 of Appendix 1 within the report.

The Committee was then invited to raise questions and comments on the report which have been summarised below:

·            Beginning the discussion, members raised questions regarding the Key Performance Indicators for external fraud. The number of new referrals was noted to have dropped in the first half of the year compared to previous years with members keen to explore the reason along with details provided in relation to number of closed cases. In response, Darren Armstrong explained that the drop in external cases related primarily to a change in approach towards Blue Badge fraud enabling resources to be redirected towards other emerging and higher risk areas of fraud investigation including housing tenancy, succession and verification work where fraud rates had continued to increase. Whist also recognising the impact of blue badge fraud, the team had developed an enhanced triage process which enabled them to continue focussing on higher profile misuse. Regarding closed referrals exceeding new referrals, officers confirmed that the figures reflected referrals which had moved from one monitoring period to the next with future updates to therefore include details (in order to provide further clarification) on those cases which had been carried forward to better demonstrate this balance.

·            Following on, details were sought on the action being taken to address performance in relation to the collection of council tax and business rates given the level of uncollected income and findings referenced from a recent Internal Audit report regarding issues with reminders and summons notices.  In response, officers advised this had been an issue referenced within the Internal Audit Interim Report with it confirmed that management had provided a full and complete management responses on how specific actions would be addressed, further details on which would be reflected within the Annual Internal Audit Report.

·            Members then requested clarification on the impact and cost benefit arising from the reduction of external fraud balanced against the increase in activity related to tenancy and housing fraud.  In response, Darren Armstrong advised the approach reflected the need to balance and focus the use of available resources on the highest risk areas of fraud and those with the most significant outcome for the Council, both financially and for residents. The team had therefore consciously stepped back to assess whether it was right to continue spending significant time on Blue Badge fraud when more significant areas of fraud risk (such as housing tenancy fraud) had been identified as likely to achieve more significant benefits for the Council and residents. Officers emphasised that whilst there was a notional value given to property recovery (as used by the Cabinet Office and National Fraud Initiative), the main driver behind the decision was that every property recovered meant one less family on the housing waiting list, representing significant social value alongside financial considerations.

·            Moving the discussion on, members noted that the Council appeared to be undertaking significant pre-employment vetting on agency staff and queried whether this should be treated as a responsibility for the agency involved. Officers explained that these checks were performed by the Counter Fraud team using an existing subscription service.. This reflected efforts to protect the Council by undertaking additional screening and vetting to ensure as much as possible was known about people coming into the Council to work with residents (particularly where assessed as vulnerable) with the aim of preventing fraud in the longer term.  Where matches or alerts were identified against the database, these were shared (subject to legal considerations) with the hiring manager to perform a risk assessment and decide on whether to continue with employment, mirroring the due diligence process for DBS checks. The team facilitated the process and provided advice when necessary but did not make employment decisions.  Members welcomed the activity being undertaken in this area in terms of the additional assurance and oversight relating to pre-employment checks as a further measure in relation to the prevention of fraud.

·            In concluding the discussion, members commended the report and, noting the team's assurance role and collaborative work, sought reassurance in relation to the cross-council work and support being provided around fraud prevention activity.  Whilst highlighting the evolving nature of risk relating to fraud and nature of emerging risks identified, assurance was provided on the work being undertaken collaboratively to maintain and manage the Council’s fraud risk register across the Council. Whilst the team facilitated this work members were reminded they did not own the risks with their role to support service areas in highlighting and seeking to mitigate against fraud risks, which was important both for providing assurance and for education purposes, so service areas understood why controls and processes were in place and why they were important to follow. The team promoted fraud awareness (including during recent Fraud Awareness Week) and conducted targeted sessions in high-risk areas including housing, adult social care and children's social care. Officers therefore confirmed that whilst the Council continued to operate what were regarded as robust counter-fraud measures, the team was always seeking to enhance these through collaborative working.

As no further issues were raised the Chair thanked Darren Armstrong and the Counter Fraud team for their hard work and efforts in relation to the ongoing delivery of counter fraud activity and it was RESOLVED to note the contents of the report and counter fraud activity undertaken from April – October 2025.