Comment

Local authorities need to embrace data sharing and modern technology to reduce debt and fraud

James Rawlins, senior consultant at Callcredit Information Group, looks at the most efficient way to tackle debt and fraud by embracing modern technology. Taking a more holistic approach to debt and fraud and targeting resources more effectively and efficiently will enable the public sector to keep pace with the changing landscape, minimise costs and maximise returns.

It’s estimated that in 2013-14, fraud and error within DWP benefits was £3.3bn and debt owed to government in 2013 was at least £22bn. Debt owed to the government has actually reduced by around £5.5bn in the last four years, but more needs to be done to prevent large volumes of old debt accumulating across departments. We know well that the older the debt is, the more difficult it becomes to collect. 

With reduced budgets and headcount, organisations face the challenge to cut spending and increase efficiencies, whilst protecting frontline services. There’s never been a better time for departments to work more cohesively and use progressive technology to produce a clearer, richer view of their customers and their interactions across the organisation. By bringing together data and advanced analytics on one platform, local authorities will be able to detect and prevent fraud more effectively as well as target debt collection more efficiently. 

Sharing data held across directorates enables better informed decisions. It’s no longer as costly as it once was to invest in a data management and analytics platform that’s capable of providing a powerful single view, unlocking the intelligence held within the data. Hosted web-based systems that are now more common enable local authorities to review single person discounts, consolidate debtor records and perform tenancy audits all on a single platform, minimising costs and maximising returns. 

Enhancing the single view with added intelligence like risk scores describing the likelihood of fraud and error or vulnerability allows risk based processes to be adopted. This methodology empowers officers to apply different levels of gateway checks in areas like housing benefit applications. 

As we’re aware, between October 2014 and March 2016 the DWP plans to fully implement the Single Fraud Investigation Service (SFIS) across all councils. Although many investigation teams have evolved into corporate fraud teams, depressingly some councils have failed to produce a business case to retain their counter-fraud function. The Audit Commission’s 2014 Protecting the Public Purse reported that there are still 39 councils that have not detected a single case of non-benefit fraud. Look and you will find! Taking a risk-based approach increases the chances of councils reaching their internal savings targets, as crucially these days, fraud detection must be self-financing. 

Prevention of fraud (and debt for that matter) is always preferable, but some will inevitably occur, even with good controls in place. Local authorities need to tightly manage debt collection to maximise income to safeguard the delivery of services. Government accounts show losses due to debt being written off as irrecoverable running at over £32bn since 2008-09. The single view of a debtor will enable councils to better understand an individual’s debt and financial circumstances, enabling them to pursue the debtor as one organisation rather than via each department that they owe money to. 

It’s not just internal data sharing in one local authority that will give them the power to turn data into actionable intelligence: it’s also sharing data between other authorities. We understand the potential of ‘big data’, which is why we brought together 14 London boroughs to establish a fraud detection project called the ‘ThreeSixty Hub’. The rationale behind the Hub is that not only can local authorities match their own data from multiple back office systems and share data between each other, but Callcredit can also help to match their data with its own extensive datasets – helping to provide greater insight and, in turn, help target potential fraudsters more effectively, saving time and money. 

Accessing and sharing more accurate information combined with a risk-based approach is emerging as the most effective way that local authorities can tackle fraud – highlighting a clear argument for more local authorities to be sharing data in the combat against fraud.

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