Mayor – January 2015 (1) DCLG Counter Fraud Funding - Acceptance

For publication Bedford Borough Council – Report to the Mayor 6 January 2015 Report by the Head of Internal Audit Subject: ACCEPTANCE OF COUNTER FRAUD FUNDING FROM D CLG 1. Executive Summary

This report relates to acceptance of a Counter Fraud Funding Grant from the Department of Communities and Local Government for the Financial Years 2014-2015 and 2015-2016 to tackle Tenancy fraud and Council Tax fraud.

2. Recommendation The Mayor is requested to consider the report and, if satisfied, approve acceptance of the Counter Fra ud Funding Grant

of £146,370 to tackle Tenancy and Council Tax fraud in the years 2014-2015 and 2015-2016.

3. Reason for Recommendation The Counter Fraud Fund offers Bedford Borough the opportunity to boost capability and capacity in tackling non-benefit fraud and

make real financial savings from reducing the cost of fraud.

4. Key Implications

4.1 Legal Issues The Department for Communities and Local Government is making available up to £16 million to English principal local authorities

over two years: 2014-2015 and 2015-2016. Local authorities that successfully bid for funding will be offered a grant to deliver their proposal. Grants will be paid under section 31 of the Local Government Act and are, therefore, not subject to ring fencing.

Mayor – January 2015 (2) DCLG Counter Fraud Funding - Acceptance

4.2 Policy Issues The Council’s policy on receiving funds requires an Executive Decision under the Financial Procedure Rules. The grant will support the authority in tackling tenancy fraud and council tax fraud.

4.3 Resource Implications Grants will be paid under section 31 of the Local Government Act and are, therefore, not subject to ring fencing. The government will make two payments to successful applicants, one in quarter 3 of 2014-2015 and a further tranche in quarter 1 of 2015-2016, the latter being subject to satisfactory progress in the early stages of the project. The grant can only be paid for expenditure incurred, or to be incurred, by a local authority. The Council’s bid included matched funding of £34,120 during 2014-2015 and 2015-2016 which will be funded through the existing fraud investigation team budget. Due to the timing of the grant receipt, a proportion of the associated expenditure will not fall in the same financial year. It will, therefore, be necessary to transfer any unused funding to an earmarked revenue reserve at year end to allow the programme to be completed in future years in line with the successful bid.

4.4 Risk Implications The risk of this funding not being accepted is that the authority will lose potential funding to make real financial savings from reducing Tenancy fraud and Council Tax fraud. The grant monies could be required to be repaid if they are not spent for the specified purpose or within the required timescales

4.5 Environmental Implications There are no environmental impacts.

4.6 Equalities Impact The activity has no relevance to Bedford Borough Council’s duty to promote equality of opportunity, promote good relations,

promote positive attitudes and eliminate unlawful discrimination. An equality impact assessment is not needed.

Mayor – January 2015 (3) DCLG Counter Fraud Funding - Acceptance

5. Details

5.1 The government has repeatedly challenged councils to do more by working together and using innovative financial management to reduce the £2 billion the sector loses every year to fraud. It recognised that local authorities have complex and conflicting demands on limited resources. In addition, they acknowledged that the transfer of benefit fraud investigators from local authorities to the Single Fraud Investigation Service from 2014 may also create challenges to some authorities’ investigative capacity as they adjust to the changes. However, the move to the Single Fraud Investigation Service also presents an opportunity to local authorities to focus on tackling non-benefit fraud.

5.2 In July 2014, the Department of Communities and Local Government committed a further £16 million to councils who were raising their game through a range of innovative projects across the country to tackle fraud. The clamp down on money wasted through fraud will tackle social housing tenancy cheats, business rates evasion, procurement fraud and social care and health tourism.

5.3 Local authorities were invited to submit proposals for funding that will result in real financial savings through effective counter fraud activities. All proposals were required to demonstrate that the savings that will be achieved will be at least equivalent to, or exceed, the funding requested. They were keen to receive proposals that sought to achieve efficiencies and service transformation through partnership working between local authorities and/or with other public and private sector organisations. Proposals were required to demonstrate an innovative and holistic approach to tackling fraud that includes detection, prevention and deterrence. Accordingly, the Council submitted a successful bid to tackle tenancy fraud (jointly with Bedfordshire Pilgrim’s Housing Association) and Council Tax fraud i.e. single person discounts and student exemptions.

5.4 The grant will enable Bedford Borough Council to significantly boost capability and capacity in tackling non-benefit fraud and make real financial savings from reducing the cost of tenancy and council tax fraud as detailed in our successful Counter Fraud Fund Bid – Application Form at Appendix A.

6. Summary of Consultations and Outcome

The following have been consulted in preparing this report:

Cllr Michael Headley, Portfolio Holder for Finance & Asset Management Cllr Shan Hunt, Portfolio Holder for Revenues & Benefits, Customer Services & ICT Financial Services Senior Leadership Team

No adverse comments have been received.

7. Ward Councillor Views

Not applicable

Mayor – January 2015 (4) DCLG Counter Fraud Funding - Acceptance

Report Contact Officer: Surinder Momi, Head of Internal Audit, email surinder.momi@bedford.gov.uk File Reference: A.3(f) Previous Relevant Minutes: None Background Papers: None Appendices: A – Counter Fraud Fund Bid Application Form