Agenda item

Reports attached.

The report before Members detailed the call-in of a cabinet decision relating to London Counter Fraud Hub.

A requisition signed by Councillors David Durant and Ron Ower had called-in the Cabinet decision.

The reasons for the call-in were as follows:

I wish to call in Cabinet decision item 9 LCFH, because the scheme offers forecast savings, but Havering has already conducted an extensive audit of council properties and PSL, so has little immediate need for the new anti-fraud “Hub”. This matters because delaying joining frees up £145,000 for other things.

When the Housing Revenue Account was restored to councils it transformed the housing department and an audit of council housing was progressed. Then after the PSL controversy, an audit of PSL is being undertaken. The housing audit would cover lawful occupancy and the one person discount. There is now small business rate relief across the board and so fraud is diminished as no one need claim. And again there was an audit of those eligible following a previous government grant to be awarded to small businesses. That is the council has made substantial progress on the audits to remove fraud in the areas covered by the proposed LCFH.

That is not to say we never join, it just means there is no immediate need to join this year. The report itself says we could delay to see how the scheme progresses first and says not all councils need join for it to get off the ground. Indeed the main argument in the report for joining this year was just to show solidarity with the rest of London. I.e. for political reasons, in keeping with council policy to make Havering part of a Greater London. However a greater political priority for delaying a year is the saved £145,000 helps keep Chafford Sports Complex open for another year.

Response from officers:

The audit of council properties and PSL was run for three years between 2015 and November 2018. This means that some of our housing stock have not been reviewed for three years so, therefore, the Council does not have up to date data regarding properties that may be allocated inappropriately.

The previous audit was not data led and was based on visiting each of our housing stock, so properties and individuals that pose a greater risk of fraudulent activity were not targeted. The LCFH will allow our data to be matched with third parties and other boroughs, so will allow us to focus on tenancies that appear to be potentially fraudulent, rather than diluting fraud resources on visits to properties which the data does not indicate fraudulent activity.

It should also be noted that the annual costs of the fraud hub are significantly less than the running costs of the tenancy fraud audit.

The fraud hub will also provide data matches for single person discount and business rate fraud, which could lead to significant savings to the Council.

A requisitioner felt that there was no immediate need to join the London Counter Fraud Hub and that the saving from not doing so this year could be put towards keeping Chafford Sports Complex open.

The Cabinet Member for Finance and Property responded that the Hub replaced the National Fraud Initiative and would allow the Council access data relating to Council housing fraud. Joining the hub would repay the associated admission costs due to the reduction of fraud that would result. Joining the scheme at a later stage would increase the joining fee and at least 26 council needed to join in order to make the scheme viable. Part of the costs were apportioned to the Housing Revenue Account and so could not be used to support Chafford. The Cabinet Member therefore felt it was sensible, pragmatic decision to join the London Counter Fraud Hub.

It was uncertain how many Councils had joined this far but the Cabinet Member expected that a number of other Council would join. The scheme had to hit its performance indicators or Councils could withdraw from it. The contract for the scheme was still being finalised between the Councils and CIPFA. Any changes to the contract would be reported to the Overview and Scrutiny Board and to Cabinet.

Expected results from the scheme were estimates based on results from past boroughs. Pilot boroughs were considered to be roughly comparable to Havering, once results had been averaged out and it was felt that the hub would provide a higher quality of referrals that the Council could investigate. More staff resources would be needed in the first year of operation due to the large amount of data matches that were expected from the hub initially.

The contract duration was seven years but reviews would be undertaken annually and officers were happy to bring these to the Overview and Scrutiny Board. There would be some developmental costs associated with the technology to identify different fraud types. This would be developed by the supplier over the life of the contract.  

Potential savings could be made from the hub highlighting the risk status of properties and more time would be spent imputing in order to get the risk rating correct. Officers felt that the largest potential risk was of the data not being correct but the hub itself would drive this.

At this point the Cabinet Member for Finance and Property and any other Cabinet Members left the Chamber.

A requisitioner reiterated that the London Counter Fraud Hub did not have to be joined at this point and that the General Fund could be used to support Chafford Sports Complex.

The Board voted to dismiss the requisition by 10 votes to 6.

Councillors Wise, Lawal, Smith, Perry, Patel, Mylod, Misir, Crowder, Holt and C White voted to dismiss the requisition.

Councillors Summers, Williamson, Ford, Hawthorn, O’Sullivan and Mugglestone voted to uphold the requisition.

RESOLVED:

That the requisition of the Cabinet decision dated 13 March 2019 be dismissed.