Detection of £111 million of fraud raises deterrent effect of audit clampdown

The Audit Commission's National Fraud Initiative (NFI), the country’s largest public sector fraud detection exercise, has sharply increased its success by detecting frauds and overpayments of £111 million.

An Audit Commission report published today, National Fraud Initiative 2004/05, shows a 33 per cent increase over the previous NFI exercise. This brings the total amount of fraud detected to over £300 million since the scheme began eight years ago. NFI is currently carried out over two-year periods.

NFI 2004/05 has helped public sector bodies identify 2,497 overpayments to deceased pensioners and more than 3,000 fraudulent claims for housing benefit. It has also played a key role in tackling social housing tenancy fraud, right-to-buy abuse and employment fraud by failed asylum seekers and UK visa overstayers.

Steve Bundred, Audit Commission Chief Executive, said: 'The message to those tempted to steal from public service bodies is that there is now more chance than ever of being caught. As more and more organisations become involved, the power of this audit exercise grows significantly.

'This work, which uses the Audit Commission's unparalleled expertise in the field of data matching, is both effective and cost efficient. And for the future, the reach is being extended further, to include frauds such as claims for student and single-person discounts for council tax. The savings to public bodies from participating in NFI are therefore huge.'

The biennial report looks at fraud and overpayments in housing benefit, occupational pensions, payroll, parking concessions, social housing and residential care.

NFI enables more than 1,000 public sector bodies to track down suspicious payments by comparing records of who is claiming pensions, housing benefits and other entitlements.

This process of data matching is comparatively low cost, but requires a high level of partnership working across the public sector. The value of fraud found has grown significantly as the exercise has been extended, but the growing success of the scheme provides a powerful deterrent to those considering fraud against the public purse.

Traditional examples of matches are council tenants with a council property in two different local authorities or non-declaration of income by benefit claimants. The introduction in 2004/05 of new forms of data means that NFI now includes matches relating to 100 per cent of local government expenditure. 

Matches are provided as referrals to participating bodies in a user-friendly application to allow prioritisation of matches and dissemination to investigators without compromising data privacy requirements.

Ends

Press release issued: May 30 2006