Match and detect

The Audit Commission for local authorities and the National Health Service in England and Wales has uncovered UK£41 million in fraud, actual and potential, by using sophisticated data-matching software. The figures relate to the National Fraud Initiative (NFI) in 1998 and involved comparing data from more than 400 councils and police and fire authorities as well as agencies such as the Civil Service Pension Scheme, NHS Pensions Agency and the Contributions Agency. Under NFI, when data on housing benefits, payroll and student awards relating to an individual appear on more than one database, it suggests that a fraud may have been perpetrated and it is then for the council or other public body to investigate the matter further. Of the reported level of fraud and overpayments, UK£25.1 million is confirmed and UK£16.5 million suspected. The principal area of loss is housing and council tax benefit (UK£15.1 million actual and UK£11 million potential fraud) followed by occupational pensions losses (UK£9.4 million actual; UK£5.2 million potential). The most productive data match was between local council housing benefit data and that from public sector occupational pension schemes (local government, the NHS, teachers and the civil service). Over 2.1 million pension records were processed in order to check whether housing benefit claimants had declared their income from occupational pensions. The analysis revealed more than 144,000 profiles that merited further inquiry. In addition over one thousands instances of pension fraud and pension overpayment were detected where occupational pensioners had died but the pension was still paid. Savings to the Civil Service Pension Scheme are estimated at UK£8.6 million.