Money

Council clamps down on fraud despite 50% increase in allegations during pandemic

Published

2 years ago

9th July 2021

Editor

Swansea Council’s fraud detection team is helping lead the way in Wales in clamping down on people trying to abuse the system by claiming money or council services they are not entitled to.

During the Covid-19 pandemic there was a 50% jump in fraud allegations made to the council last year on issues ranging from organised fraudsters trying to swindle the council out of pandemic business grants to those fraudulently claiming benefits or council tax relief or abusing the blue badge disability parking system.

But while the council handed out more than £130m in grants, rates and other support to more than 4,000 city businesses over the last 15 months, potentially-fraudulent applications were picked up and dealt with.

When the pandemic started last year councils including Swansea were targeted in sophisticated efforts to claim thousands of pounds of grant by fraudsters posing as some of the high street’s best-known retailers, ranging from household names in pizza outlets to pub chains and department store companies.

In some cases the fraudsters used the identities of company finance directors in the hope of persuading council teams to part with the money.

Rob Stewart, Leader of Swansea Council, said it was vital that the millions of pounds of public money spent on services every year gets to those who need it. But, at the same time, he warned the council would clamp down on fraud wherever it’s found.

He said: “Among local authorities in Wales our fraud team helped lead the way in seeking out, detecting and acting in cases of fraud.

“At the time of the lockdowns there was tremendous pressure on our teams to make sure grants got to those businesses who needed them as quickly as possible to help them stave off going under, protect jobs and pay bills.

“We were among the quickest at handing out funds to those who were eligible. But at the same time fraudsters were submitting grant claims in the hope they’d slip through the net because of the high volume of applications.

“Our counter fraud team also detected a number of applications from businesses no longer trading, others claiming to occupy premises that they didn’t as well as those posing as business owners they weren’t.”

Robust systems put in place to manage and check business grant applications during the pandemic also meant that £2.4m of grants that were incorrectly applied for were instead directed to those who qualified for them.

man people night dark — **Fraudsters were submitting COVID support applications in the hope they’d slip through the net thanks to the high volume of applications** (Image: Mikhail Nilov / Pexels.com)

The report said that while most of the rejected applications were due to businesses applying incorrectly and not fraud, the robustness of the application check process ensured money was going to the right place and allowed ineligible businesses to be sign-posted to other potential support schemes.

The council’s work to tackle fraud is highlighted in the counter-fraud team’s annual report being presented to the Governance and Audit committee next week.

Among the figures noted in the report are that a total of 302 cases of potential fraud were reported to the council in the last financial year, 2020/21, up 50% from 216 the year before.

This figure includes 37 cases relating to Covid-19, 86 cases of alleged benefit fraud, 87 cases in relation to council tax, 39 in relation to social housing, 23 claims of potential fraud within the council and 25 claims of blue badge fraud.

Of these allegations a total of 81 are currently either being actively investigated or still being evaluated for further action.

The number of claims of internal fraud at the council was down to 23 in 2020/21 from 34 the year before with 13 new cases reported among a workforce of more than 11,000. Eleven cases are still being investigated while advice and other action was taken in seven cases. Two claims of fraud were found not proven.

The report said that one reason for the rise in overall reported allegations of fraud was due to an online reporting tool set up by the council as part of its work to tackle fraud by making it more straightforward for people to report it.

Cllr Stewart said: “Fraud is something that happens in society in general and, like other organisations, councils are targets both by individuals and by more organised criminals.

“The annual fraud report shows Swansea Council is not a soft touch and we will challenge fraud wherever we find it, aiming to bring to justice those engaged in such practices.”