Agenda item

This report details the performance of the Council’s Corporate Anti-Fraud Team (CAFT) and includes details of the team’s performance together with an update on developments during the period 1 April 2020 – 30 November 2020.

The Committee is asked to note the Anti-fraud activity of the Corporate Anti Fraud Team for the period 1 April 2020 – 30 November 2020.

The Head of Anti-Fraud spoke to the anti-fraud report, and summarised the report in three parts. The first was focused on the performance of the team. In the report, officers guided Members to the figures which were slightly down although the number of investigations was broadly the same as last year. Officers advised the inability to complete a lot of the investigations was due to the pandemic and due to the restrictions working in key areas, visiting residents and interviewing people suspect of fraud.

In response to the previous committee meeting, officers had added a couple of case studies relating to the Covid-19 business grants, which was to give the Committee an illustration of some of the things seen.

Officers further added in the report staff internal investigations. Following a request from the December 2020 meeting, there was a very high level of data provided.

The Chair and Members thanked officers for the good report that included case studies, which helped understand data better, and the work operated by officers in doing thorough work.

Members discussed the case study and noted the issues that were being investigated, and raised a question as to how the case studies became referrals in the first instance, and in terms of investigations how it was granted. Officers responded that in the first grant scheme they had built an application process, which asked applicants to provide details about their business, about who they were. Some of the fraud cases had been picked up through the application process as they had been identified early and in many of these cases money was stopped from being paid out. With the examples provided, officers were able to identify the suspicious activity early to address the fraudulent activity to stop paying out the grants that the individual was never entitled to. Supplementary, Members asked how convinced officers were in finding any misdemeanours in the application process by other means. Officers informed that they had built a fairly tight application process, addressing the fraud risks, and had put in place fraud prevention from the start. Officers was assured that they had a good scheme as they were learning new things all the time.

Further to the case studies, Members commented on lessons learned, and enquired whether the lessons learned were easy for all to learn from and to replicate in the future, and whether there was any mechanism for feeding back to the Treasury Chancellor. Officers responded that they were accountable to the Department for business energy and industrial strategy in terms of grants, and that department also had seen the reports and would have seen how these frauds were occurring. Officers were seeing more requirements on the gov.uk website and noted that it was being fed back to government which was making a difference. 

Members raised a question relating to fraud and in the context of the pandemic which was fast changing and the type of fraud committed. In particular, in the digital world what the officer’s approach was to the future in a time of pressure, capacity and what were the risks not mentioned within the report. Officers responded that the pandemic had brought a whole raft of new challenges and as fraud was always changing, in a time of pandemic, fraudsters would see it as an opportunity. Officers noted that across local and central government they was understanding about these fraud risks and looked for solutions. Officers had recently sent off the data for the National fraud initiative, which was a statutory exercise for all councils with the Cabinet Office every two years, and this year it had included the pandemic business grants, and thus with the fresh review locally, regionally, or nationally, they would be fighting back against fraud.

Positive comments were made by Members about the rigorous application Croydon had set up for businesses, which had seen a low number of investigations. Officers noted that as the process had been set up early, it had caused delays in payments to businesses, and this had really been positive for the Council as, for example, if there were fraud cases the cost of the fraud was the responsibility of the local authority and Croydon could not afford to recover business grants that had been paid out to those not eligible.

Comments were made by Members on the downside to which fraudulence would fall on the local authority, where, for example, the Council was being as thorough as possible, there may be some local authorities that would potentially be reluctant to investigate if it meant that they would be liable for funds that was paid out due to fraud; in addition, when recuperating losses or funds from fraudulent claims, in effect, it covered the Council from having to indemnify the government. Officers confirmed these points.

Members commented on the notion of getting the balance right, addressing that it was making sure the metrics was correct and that the Council was not too focused, given the financial situation, on the anti-fraud side, meaning that the Council had been unduly harsh for some businesses. Officers acknowledged the comments and noted that that the post assurance information would show in the near future some comparators which would be useful.

The Committee RESOLVED to note the Anti-fraud activity of the Corporate Anti-Fraud Team for the period 1 April 2020 – 30 November 2020.