Government launches local government counter fraud and corruption strategy

March 23, 2016

The Government has published a three-year counter fraud and corruption strategy for local government in a bid to reduce the estimated £2bn lost each year.

The revised strategy, Fighting fraud and corruption locally, will run from 2016 to 2019. It can be viewed here.

The document sets out ‘The 6C’s for catching cheats’: culture; capability; capacity; competence; communication; and collaboration.

It says there is “a clear need for a tougher stance” to be taken towards fraudsters. “This includes tackling cross boundary and organised fraud and corruption attempts, as well as addressing new risks.”

The document also warns that there are further challenges arising from changes in the wider public sector landscape “including budget reductions, service remodelling and integration, and government policy changes”.

The strategy’s 26 recommendations include:

A working group from local authorities should be established to look at the area of powers, incentives and information barriers to: examine areas where barriers exist; gather evidence; look at achieving quick wins; place examples of good practice in the Fighting Fraud and Corruption Locally Good Practice Bank.
A working group from local authorities should be established to look at the area of fraud and corruption enablers with a view to preventing more fraud and corruption.
DCLG should work with local authorities and the CIPFA Counter Fraud Centre (which host Fighting Fraud and Corruption Locally) to acknowledge good practice and should share useful case studies to ensure that there is an appreciation by central government of achievements at local level.
The Department for Communities and Local Government should give consideration to the provision of future incentives to help local authorities to tackle housing fraud.
A working group should be established in relation to procurement fraud.
There should be a structured programme on fraud and corruption awareness for elected members and senior managers.
Local authorities should ensure that they have the right resources in place by having made an assessment of the risks on fraud and corruption which should be reported to the Audit Committee or similar.
Local authorities should continue to work together on counter fraud hubs or, should investigate the benefits of joining hubs, and should share information where possible to help each other increase resilience to fraud and corruption and establish best practice.
Local authorities should make sure that they have in place robust reporting procedures including whistle-blowing and that these include assessment through the BSI or Public Concern at Work and that staff are trained in this area.
Local authorities should look at insider fraud and consider using the Internal Fraud Database at CIFAS following the London Borough of Ealing pilot.
Local authorities should horizon scan and explore new areas, e.g. cyber and identity issues and explore new methods to detect fraud, e.g. behavioural insights.

As part of the initiative, the Chartered Institute for Public Finance & Accountability (CIPFA) has launched a new centre of excellence for counter fraud.

Local Government Minister Marcus Jones said: “We are determined to find, catch and prosecute the fraudsters who rip-off councils denying taxpayers billions of pounds.

“Across government we are clamping down on corruption and I’d urge councils to make full use of these suggestions to get tough on fraud.”

Sir Eric Pickles, the Government’s ‘Anti-corruption Tsar’, added: “A small minority cheat hard working taxpayers out of billions of pounds every year but better prevention, detection and prosecution will mean we can not only throw these thieves in jail – but also recover cash for our frontline services.

“The tips we are publishing today – alongside the millions of pounds we have already invested – will ensure that town halls crack down on those who put our services at risk.”