Fraud and the digital economy
19 October 2016
Sue Holloway, Director of Services Strategy
The Digital Economy Bill was hailed as a powerful weapon in the fight against fraud, but it’s barely featured in recent debates.
It might not be generating headlines, but it’s a problem that turns up time and time again – Blue Badge parking, sub-letting in social housing, council tax discounts and Right to Buy applications are but a few examples.
Estimates vary, but however many millions of pounds of taxpayer’s money is lost to fraud each year, we know that government could do with it back.
Take housing. A recent survey by CIPFA showed that housing fraud made up 5% of the total volume councils detect each year, but at £146m it’s a whopping 50% of the cost.
Detection is still largely manual, and for Right to Buy there’s added pressure as most applicants have the right to a decision within four weeks.
Data is key. There will be indicators within a council’s own housing and benefits data that help spot risks, and when coupled with supplementary forms and simple cross-checks this would ensure only eligible tenants can exercise the right to buy.
Having access to accurate information is vital to fraud prevention.
The Blue Badge Improvement Service created a national register of badge holders that is used by every council. It prevented a well-known fraudulent practice where applications were made to multiple authorities by the same individual. It also created a simple process for notifying the issuing council of a change of address, previously a bureaucratic nightmare for all involved.
Before the service was launched, the Department for Transport estimated the annual cost of Blue Badge fraud at £46m a year. Recent figures suggest a significant improvement, with councils now detecting around £4m.
How the anti-fraud measures in the Digital Economy Bill will work in practice isn’t yet clear, but if you look at the cost to the public purse, tackling housing fraud might be a good place to start.