Costliest fraud in £2.8bn local government finance 'hole' is the easiest to tackle, says Callcredit
Tenancy fraud is the costliest single fraud for local government, costing £900m each year (source: National Fraud Office) and represents nearly a third (32%) of the estimated £2.8bn hole that exists in local government finances. Comprising the illegal subletting of social housing, it prevents vulnerable citizens from getting access to much-needed social housing and is therefore not just the costliest but the most pernicious too.
But unlike other types of public sector fraud, this fraudulent behaviour is relatively easy to stop as the necessary information is available through a number of different data sources including the Electoral Roll, claims Andrew Davis, Director of Public Sector at Callcredit, the UK's second largest Credit Reference Agency (CRA).
Andrew made his comments at a conference held today (1 December) in London. Entitled 'Fighting Fraud Locally', the conference was attended by local authority Chief Executives and Finance Directors, as well as senior fraud managers working in local government who are tasked with combating the estimated £21billion that is lost each year to public sector fraudsters. The keynote speaker was Baroness Hanham, Parliamentary Under Secretary of State at the Department for Communities and Local Government. Conference delegates were amongst the first to hear about some new recommendations outlined in the new Fighting Fraud Locally strategy, launched by the National Fraud Authority in co-ordination with senior local government representatives.
Andrew's comments formed part of his presentation to the delegates entitled 'Data sharing and the role of credit referencing agencies'. In his presentation, Andrew pointed out:
- Only a few simple checks are required to identify whether tenancy fraud is taking place
- These checks include checking whether an individual is alive, financially active at a property (and not financially active at another property) or gaining evidence of unexpected tenants
- Much of this insight can be acquired by CRAs from sources such as the Electoral Roll which remains an invaluable source of information
Commenting on the role that CRAs can play in combating this crime, Andrew said: "We compile and can access a vast amount of information from a number of different sources. This data is subject to strict data protection legislation but can, in permitted circumstances, be used by local governments to check people's identities and status. At a time when 1.7m families are on waiting lists for social housing and local authorities are forced to use expensive temporary accommodation, then tackling fraud is a crucial part of bridging the gap between housing demand and supply".