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Watchdog slams ‘shocking’ benefit fraud

Tuesday, 20 May 2008

An Audit Commission campaign has found a record £140m in benefit fraud and overpayment.

The Commission’s National Fraud Initiative (NFI) report 2006/07 shows a 26 per cent increase in detected fraud and overpayment, from £111 million in 2004/05.

NFI has now identified around £450m in fraud and overpayments since it started in 1996, at a cost of less than £10m.

Largest public sector anti-fraud programme

Despite this success, however, the Commission is calling on the public sector to devote more resources to using the NFI information to track down fraud.

The NFI is the country's largest public sector anti-fraud programme. It is a computer based system, which matches information such as housing benefit claims, pensions and social housing records from local councils, the NHS, police authorities, local probation boards and fire and rescue authorities across England.

The matching process enables public bodies to share and compare information through a secure website, and to identify those taking services or money that they are not entitled to.

Typical examples include home owners pretending to be homeless and renting (and sub-letting) council property in two different authorities, fraudulent claims for housing benefit and pensions being claimed for deceased people.

Trained staff

Michael O'Higgins, chairman of the Audit Commission, said that these were not victimless crimes and called some of the fraud found “both blatant and shocking”.

“People are stealing homes, pensions, student loans, parking places and benefits, seemingly confident that no one is tracking them. They are wrong,” he added.

O’Higgins urged all public bodies to put in place the necessary trained staff to work with us and follow up any matches.

“It makes both moral and financial sense to detect fraud and overpayments,” he noted.

One example of the kind of fraud that was discovered involved a tenant who had made a homeless application and was given a tenancy in Southwark but had actually bought a property in the London Borough of Barking and Dagenham.

Further investigations revealed that the person had also obtained another property from Southwark, using a different name, and was not living in either but subletting both the Southwark properties. Both tenancies were terminated.

Experienced housing investigator

Southwark Council is an example of how focusing the National Fraud Initiative information on tracing people who take money and services that they are not entitled to frees them up for those in need.

For NFI 2006/07 Southwark Council gave the full range of NFI housing matches to an experienced housing investigator, who was given time and support to follow them up.

The outcomes so far include the recovery of 30 properties, with a further 19 recoveries anticipated, freeing them for genuine tenants and ending the need for expensive temporary accommodation, and the identification of 65 cases where a right to buy application has been awarded inappropriately.

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