Fraud and the digital economy

19 October 2016
Housing Image for Empt Properties Review Case Study

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.

Housing fraud

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.

Accurate data

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.