Agenda item

The report sets out a summary of the counter fraud activity undertaken in 2025-26, including both proactive and reactive work across a range of fraud risks and also fulfils the requirements of the Local Government Transparency Code 2015, which requires local authorities to publish details of their counter-fraud activity.

Darren Armstrong, Deputy Director Organisational Assurance & Resilience, introduced a report from the Corporate Director Finance & Resources presenting the Council’s Annual Counter Fraud Report for 2025-26, which summarised the counter fraud activity undertaken across multiple fraud types (including internal fraud, housing tenancy fraud, external fraud and proactive work) and had been designed to support the Committee in obtaining assurance on the robustness of the Council’s counter fraud arrangements.  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.

In considering the report the following key issues were noted:

·            The high priority identified in terms of counter fraud activity given the inherent and significant level of risk posed by fraud to the Council, with the Council having established a well developed approach towards tackling fraud and corruption based on a combination of reactive and proactive prevention and detection activities in line with best practice.

·            The Annual Counter Fraud Plan had been designed to ensure that resources were being effectively targeted and deployed to prevent and detect fraud, underpinned by the Council’s Anti-Fraud and Bribery & Whistleblowing policies.  A summary of all reactive and proactive counter fraud activity undertaken in 2025-26 had been detailed within the Annual Counter Fraud Report attached as Appendix 1 to the report.

·            The broad programme of counter fraud activity undertaken during 2025–26 which had included reactive investigations as well as proactive preventative work across all major fraud risk areas involving 34 internal fraud referrals which members were advised had involved 31 cases concluded;152 housing fraud cases, with 133 cases closed and 40 external fraud referrals, with 61 cases concluded.

·            Across these areas, fraud and/or irregularity had been identified in a number of cases, with outcomes ranging from recovery of assets and prevention of financial loss through to strengthening of controls and referral for further action.  Members were advised that tenancy and housing fraud remained one of the Council’s highest priority fraud risks due to its direct financial impact and the importance of ensuring that social housing continued to be allocated fairly and to those in genuine need. During 2025–26, the Counter Fraud and Investigation activity had delivered strong outcomes in this area, including the conclusion of 22 fraudulent housing cases, resulting in the recovery or protection of properties and a notional financial benefit of approximately £1.45 million.  This work had included the recovery of properties where tenants were no longer in occupation, prevention of fraudulent succession claims and identification of unauthorised occupants.  In response to emerging risks, members were advised the service had also strengthened preventative controls, including introduction of enhanced verification for Right to Buy applications, implementation of a structured verification process for tenancy succession applications and increased use of data and intelligence tools to identify anomalies and improve assurance with the approach not only felt to support the recovery of properties but also strengthen the integrity of the housing allocation processes, reducing the risk of future fraud.

·            Whilst referrals in relation to external fraud activity had reduced, following a change in process and redirection of resource in relation to the investigation of blue badge fraud, members were advised that work in this area included a broad range of risks affecting the Council including council tax and business rates fraud, grant fraud, direct payments, insurance, and other financial irregularities focussed on both investigation of suspected fraud and strengthening preventative controls across services.

·            The service had also maintained a strong focus on proactive and preventative activity which during 2025-26 had included delivery of the National Fraud Initiative (NFI) data matching exercise, identifying financial savings and strengthening data integrity; participation in the London FraudHub, enabling real-time cross-authority data matching and fraud detection; targeted reviews, including housing allocation analysis and fleet asset verification and enhanced fraud awareness and support provided to high-risk service areas.

·            Members were advised that the NFI exercise had delivered measurable outcomes.  This had included significant notional savings through the cancellation of fraudulent or invalid Blue Badges; identification of council tax reduction overpayments and undeclared income; and improvements in data accuracy across key systems with the proactive activity demonstrating the shift towards a more intelligence-led and preventative model, enabling the Council to identify risks earlier, improve control environments and reduce exposure to fraud.

Overall, the counter fraud activity undertaken during 2025–26 was felt to highlight a number of key themes (identified as follows) demonstrating a function that was continuing to develop and enhance its approach, with increasing emphasis on prevention, intelligence and integration with wider governance and assurance frameworks:

·            Housing fraud remaining the area of greatest financial impact, with strong outcomes achieved through both investigation and prevention.

·            Proactive activity becoming increasingly important, with data-led approaches improving early detection and reducing reliance on reactive investigations.

·            Internal fraud, while lower in volume, continuing to present higher complexity and governance risk, requiring robust investigation and follow-up.

·            Improvement in cross-service collaboration, particularly in housing, resident support and verification processes, strengthening overall assurance arrangements.

Having noted the update provided, the Chair then invited the Committee to raise questions on the report, with the responses summarised as follows:

·            Further clarification was sought on the basis of the reduction in new external fraud referrals, which it was confirmed had related to the change in approach towards the investigation of blue badge fraud (which had previously accounted for a significant proportion of direct referrals) with a majority of these now being picked up directly through the Council’s Healthy Streets and Parking Service following the upskilling of officers in that area with a resulting reduction in referrals from 300 (2023-24) to 204 during 2024-25.

As no further comments were raised the Chair thanked Darren Armstrong and his team for their hard work in relation to the ongoing delivery of Brent’s Counter Fraud Activity (including the less visible proactive work undertaken to prevent and detect fraud) and it was RESOLVED to note the outcomes of the activity undertaken during 2025-26