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AUDIT, GOVERNANCE AND STANDARDS COMMITTEE |
15 March 2021 |
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Fraud and Compliance Team Update 2019-20 |
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Final Decision-Maker |
Audit Governance and Standards Committee |
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Lead Head of Service |
Stephen McGinnes Mid Kent Services Director |
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Lead Officer and Report Author |
Sheila Coburn, Head of Mid Kent Revenues and Benefits Partnership |
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Classification |
Public |
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Wards affected |
All
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Executive Summary |
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To update the Committee on work undertaken by the Revenues and Benefits Fraud & Compliance team for the financial year 2019-20.
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Purpose of Report
Noting
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This report makes the following recommendations to this Committee: |
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That the contents of the report are noted.
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Timetable |
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Meeting |
Date |
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Audit Governance and Standards Committee |
15 March 2021 |
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Fraud & Compliance Team Update 2019-20 |
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1. CROSS-CUTTING ISSUES AND IMPLICATIONS
Issue |
Implications |
Sign-off |
Impact on Corporate Priorities |
We do not expect the recommendations will by themselves materially affect achievement of corporate priorities. |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Cross Cutting Objectives |
None
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Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Risk Management |
This report is presented for information only and has no risk management implications. |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Financial |
The Fraud & Compliance team receives funding from Kent County Council of £136,620 (on expected 3:1 savings). The cost to Maidstone Borough for the service is £23k |
Section 151 Officer & Finance Team |
Staffing |
There are no changes to staffing proposed in this report.
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Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Legal |
It is a function of the Audit, Governance and Standards Committee to monitor the effectiveness of Council's counter-fraud and corruption Strategy. This report provides an update on the work undertaken by the Revenues and Benefits Fraud & Compliance team. There is no statutory duty to report regularly to Committee on the Team’s performance. However, under Section 3 of the Local Government Act 1999 (as amended) a best value authority has a statutory duty to secure continuous improvement in the way in which its functions are exercised having regard to a combination of economy, efficiency and effectiveness. Reports on the Team’s performance assist in demonstrating best value and compliance with the statutory duty. |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Privacy and Data Protection |
Accepting the recommendations will not increase the volume of personal data held by the Council. |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Equalities |
The recommendations do not propose a change in service therefore will not require an equalities impact assessment |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Public Health
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No impact |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Crime and Disorder |
No impact |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
Procurement |
No impact |
Sheila Coburn Head of Mid Kent Revenues and Benefits Partnership |
2. INTRODUCTION AND BACKGROUND
2.1 The purpose of this report is to advise the Committee of the work undertaken by the Fraud & Compliance team within the Mid Kent Revenues and Benefits Partnership.
2.2 In 2016 the responsibility for investigating Housing Benefit fraud was
moved from the Council’s Housing Benefit service to the Department for
Work and Pensions (DWP).
2.3 The Council took the decision to continue with a shared fraud team along with Swale and Tunbridge Wells borough councils as part of Mid Kent Services using the team to investigate fraud and error within
Council Tax and Business Rates.
2.4 The localisation of Council Tax Support and reliance on Business Rates as
an income for the authority changed the financial risk to the Council and
preceptors. Whilst there had been some activity to address the risk
associated with single person discounts for Council Tax, the service had
historically focused its efforts on Housing Benefit.
2.5 The transfer of the Housing Benefit fraud function to the DWP created
both a risk and opportunity to the Council. With the administration of
Housing Benefit and Council Tax Support being directly linked the Council
had in effect been able to ‘police’ the two systems at the same time. With
the removal of Housing Benefit and the investigation resource that was
deployed with it, this had the potential to leave Council Tax Support and
therefore Council Tax exposed to fraud with no identified resource to
investigate or deter fraud.
2.6 The change also created an opportunity in releasing a team of experienced
specialist staff, with good local knowledge, to both manage the ongoing
risk within Council Tax Support and deliver capacity to expand their work
into other areas both within the Council Tax and Business Rates systems.
2.7 With the value of discounts and exemptions estimated in excess of
£16 million and the risk of customer fraud high, agreement was reached
with the support of the precepting authorities to fund the current team on
the understanding that there would be a suitable return on investment.
2.8 The agreed business case set out a method of sharing the cost and
projected savings in line with the value to each partner based on their
level of precept.
2019/20 Outturn
2.9 The focus of the 2019-20 financial year was on the new release of
National Fraud Initiative data and small business rate relief accounts,
whilst a new system was being implemented for the monitoring of single
person discounts.
2.10 The New Homes Bonus project in October 2019 was a worthwhile exercise
for the team, with no additional costs apart from postage and a few credit
checks being incurred. For Maidstone, 147 properties were found to be
occupied. The number of properties is multiplied by £1,400 to give the
results of the exercise amounting to savings of £205,800.
2.11 In 2018-19 penalties were introduced where those residents who do not
report changes or who fraudulently make claims for discounts are issued
with a penalty of £70. The number of penalties issued increased in 2019-
20.
2.12 Table 1 shows a summary of savings generated across the 3 authorities
by the team for 2019/20.
Table 1
Small Business Rate Relief |
£257,954 |
Single Person Discount |
£19,059 |
New Homes Bonus |
£543,200 |
National Fraud Initiative (Council Tax Reduction and Single Person Discount) |
£389,936 |
Housing Benefit Matching Service (HBMS) |
£72,721 |
Penalties |
£3,010 |
Other |
£55,745 |
Total |
£1,341,625 |
2020-21 (so far)
2.13 In conjunction with the Kent Intelligence Network (KIN) software was
partly funded by Kent County Council with a view to share
information with other authorities in Kent to help reduce fraud and error
in the county.
2.14 We were proposing to use this software in 2020-21 to further increase
the savings that can be identified.
2.15 However, the amount of work the Fraud & Compliance team has been able
to carry out this year has severely been disrupted by the COVID pandemic.
2.16 For the first 3 months of the financial year, all members of the Fraud &
Compliance team were assisting in other areas of the Council in response
to the pandemic.
2.17 For the rest of the year the team has been able to carry out limited
projects with the annual New Homes Bonus showing favourable results.
2.18 Kent county Council has partly funded a debtor tracing tool (Retriever)
which is used to trace the whereabouts of Council Taxpayers who have left
their properties owing amounts of Council Tax.
2.19 This has been successful with over 400 Council Tax debtors being traced so
we can contact them at their current address to recovery monies due.
2.20 Table 2 shows the progress so far for 2020-21
Table 2
New Homes Bonus |
£758,800 |
Retriever (Council Tax debt brought back into recovery) |
£779,656 |
Penalties |
£350 |
Total |
£1,538,806 |
3. AVAILABLE OPTIONS
3.1 Option 1 - The Council could decide not to have a Fraud and Compliance
team but this is not recommended given the team has demonstrated a
return on the funding by Kent County Council by more than the required
3:1.
3.2 Option 2 - The Council continues to have a Fraud & Compliance team to
ensure it has a dedicated resource to address fraud and error.
4. PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS
4.1 Option 2 is the preferred option for the reasons stated.
5. RISK
5.1 This report is presented for information only and has no risk management
implications.
6. CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK
None
7. NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION
None
8. REPORT APPENDICES
None
9. BACKGROUND PAPERS
None