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by Jenni Davidson
30 June 2016
Over £110m of ‘fraud and error’ found in Scottish public sector

Over £110m of ‘fraud and error’ found in Scottish public sector

Image credit: PA images

Over £110m of “fraud and error” has been uncovered in 10 years through a national public sector data-sharing initiative.

The National Fraud Initiative (NFI) is a counter-fraud exercise coordinated by Audit Scotland that runs every two years.

It matches electronic data within and between public bodies to find fraudulent or mistaken payments.

The recovered money is the result of overpayments and incorrect discounts and benefits being paid, such as pensions paid for people that had died or returned to work or housing benefit paid to students.

More than 100 public bodies across central government, local government and health participated in the latest investigation, which has led to 5,939 overpayments worth approximately £4.6m being recovered.

A total of £16.8m worth of error has been recorded in the two years since the last NFI report in 2014, including 4,846 council tax discounts reduced or cancelled, 194 pensions stopped, 3,073 blue badges stopped or flagged up for further checks and 868 housing benefit payments stopped or reduced.

This brings the cumulative total since the NFI began in 2006 to £110.6m in Scotland and £1.39bn across the UK.

The figures include detected fraud, error, overpayments and recoveries as well as estimated future losses that have been prevented.

This is the fifth biennial NFI and it remains the largest national fraud detection and prevention scheme using data-matches across public bodies.

Russell Frith, Assistant Auditor General, said: "The National Fraud Initiative makes a significant contribution to the security and transparency of public finances by checking that services are provided to the correct people and therefore helping to reduce fraud and error.

“It also acts as a powerful deterrent against persons who might be planning to commit fraud.

"It's important that public bodies take full advantage of the support that the Initiative can provide to their detection work, and the increasing opportunities the technology creates for strengthening the fight against fraud."

Audit Scotland has also reported on the performance of bodies which participate in the NFI.

While it said that there is strong evidence that most bodies take the NFI seriously by putting adequate arrangements in place, there is still room for improvement, including scope to investigate matches more quickly once they have been identified.

A COSLA spokesman said: “COSLA welcomes the report from Audit Scotland on the National Fraud Initiative. 

“Councils are committed to tackling fraud and ensuring that money goes to support those who have genuine need. 

“The NFI is an important tool in assisting councils and other public authorities to share data and access the information needed to combat fraud and error and, as the news release suggests, this has been a successful initiative for fraud prevention across the public sector.”

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