At its meeting on 14 December 2016 the Audit Committee considered a report on the business case for the Counter Fraud Unit and RECOMMENDED TO COUNCIL that it approve option 3 of the business case to establish a permanent Counter Fraud Unit, subject to similar approval being made at all partner authorities and that, should all necessary approvals not be forthcoming, option 2 be the Council’s default position.

87.1           At its meeting on 14 December 2016, the Audit Committee had considered a report which set out a business case for the permanent establishment of a Counter Fraud Unit. The Audit Committee had recommended to Council that it approve option 3 of the business case to establish a permanent Counter Fraud Unit, subject to similar approval being made at all partner authorities and that, should all necessary approvals not be forthcoming, option 2 be the Council’s default position.

87.2           The report which was considered by the Audit Committee had been circulated with the Agenda for the current meeting at Pages No. 257-298.

87.3           In proposing the recommendation from the Audit Committee, the Chair of the Committee advised that, at the meeting in December, Members had been presented with a progress report on the work undertaken by the Counter Fraud Unit and he was pleased to report that additional work had now been undertaken with business rate payers which had resulted in increased rateable values totalling £335,000 being added to the valuation list of the Council. The work undertaken was part of a pilot exercise investigating the potential of forming a Countywide Counter Fraud Unit. A business case had been prepared based on initial findings and was being presented to all of the Councils in Gloucestershire as well as West Oxfordshire District Council. To date, four Councils had agreed to become full members of the Unit and another two were to make decisions in the coming weeks. The County Council, Ubico Ltd. and a number of housing providers had also agreed to purchase services from the new Unit. The Audit Committee had considered the work of the Unit, along with the options within the business case, and considered that full membership of the Counter Fraud Unit was appropriate for the Council.

87.4           A Member questioned when the replies of the other partner authorities would be known and, in response, the Head of Finance and Asset Management advised that Stroud District and Gloucester City Councils would be making decisions shortly. All other Gloucestershire authorities and West Oxfordshire District Council had already agreed that they would be full members of the Unit. The Head of Finance and Asset Management undertook to provide an update via email on the status of the remaining partners that were considering becoming members of the Unit.

87.5           Having been seconded, it was

                  RESOLVED          That option three of the business case, to establish a                                           permanent Counter Fraud Unit, be APPROVED, subject to                                     similar approval being made at all partner authorities; should all                            necessary approvals not be forthcoming, option two will be the                                 Council’s default position.

To consider the progress of the Counter Fraud Unit and to recommend to Council the approval of option 3 of the business case to establish a permanent Counter Fraud Unit, subject to similar approval being made at all partner authorities; should all necessary approvals not be forthcoming, option 2 would be this Council’s default position.

37.1           The report of the Head of Finance and Asset Management, circulated at Pages No. 90-129, asked Members to consider the activity undertaken by the Counter Fraud Unit to date and to recommend to Council the approval of option three of the business case, to establish a permanent Counter Fraud Unit, subject to similar approval being made at all partner authorities; should all necessary approvals not be forthcoming, option two would be the Council’s default position.

37.2           Members were reminded that, in 2013/14, the government had announced that local responsibility for the investigation of benefit fraud was to be transferred to the Department of Work and Pensions and a Gloucestershire-wide Counter Fraud Unit had subsequently been established following a successful DCLG bid.  The Counter Fraud Unit had been undertaking feasibility work on behalf of a number of Gloucestershire authorities, West Oxfordshire District Council and Cheltenham Borough Homes.  The work had been undertaken as a pilot and a business case had now been drafted with a view to creating a permanent Counter Fraud Unit which would serve the partner organisations across the region.  The work undertaken for all authorities within Gloucestershire, and West Oxfordshire, was summarised at Appendix A to the report.  Particular attention was drawn to Page No. 95 which related specifically to Tewkesbury Borough Council where work had been carried out in respect of Council Tax, housing register applications, business rates and fly-tipping.  In addition, a number of policies which had recently been approved by the Executive Committee had been prepared by Officers from the Counter Fraud Unit.  The arrangements to date had been well-received and a decision was now required by all partners regarding full membership with effect from 1 April 2017.  The business case for the permanent establishment of the Counter Fraud Unit was attached at Appendix B to the report and outlined three potential options: carry on as is; partial formation of a countywide unit; or full formation of a countywide unit.  Given the performance to date and the potential for future counter fraud work to be undertaken, it was Officers’ view that the Council should support the option to form a unit comprising all authorities.  Whilst there would be an increased cost over the base budget, this would effectively be covered by the increased ongoing income resulting from the successful work already undertaken and the business case illustrated the potential additional income that could be generated from detecting and preventing fraud through the establishment of a permanent unit.

37.3           A Member felt that the income and loss avoidance figures, set out at Page No. 123 of the report, suggested that this was an easy decision and he queried what was meant by income generation.  The Head of Finance and Asset Management advised that this was based on the initial stages of the pilot, for instance, the single person discount review in Council Tax had led to discounts being removed retrospectively and the review of housing applications had led to the cancellation of 63 applications which  ...  view the full minutes text for item 37