01.10.12
Mapping the fight against fraud
Source: Public Sector Executive Sept/Oct 2012
Fraud costs the UK billions every year, placing a huge strain on government – but with access to national addressing and digital mapping data, the defence against it is growing, as Graham Hughes from Ordnance Survey explains.
The public sector is rich in data. From running public services through to recording and collating public sector information, huge quantities of data are amassed affecting all aspects of government. With so much data being generated it is not surprising that the public purse is such an attractive target for fraudsters, who look to abuse the tax, benefit and grants systems for their own gain.
Fraud and error costs public services in the UK an estimated £21bn a year according to the National Fraud Authority (NFA) 2012 Annual Fraud Indicator. From benefits and tax credits fraud to electoral fraud and council tax avoidance, most areas of central, local government and the NHS are under threat. The same Fraud Indicator in 2012 estimated benefit fraud and error for 2010- 11 at £3.2bn for the Department for Work and Pensions (DWP), while council tax fraud is now thought to cost local authorities £131m a year, an increase of 32% from 2011 figures.
But it is not just loss of revenue caused by fraud that is of concern. Errors in recording and collating public sector information are estimated at £9.6bn. A recent report by Policy Exchange suggested the public sector could save up to £33bn a year by using its data more effectively. In particular, the report suggests that there is scope to accelerate efforts to reduce local taxation fraud and error.
Difficult to detect
Sharing and understanding the amount and quality of data held by the public sector has traditionally been a challenge due to the number of IT systems which often don’t link to one another. This makes it easier for fraud and error to enter the system and once in the system, more difficult to detect.
An underlying problem has been that many central and local government organisations have, over the years, built and maintained front and back office systems which often have multiple address feeds. Local authorities, for example, work hard to keep up with changes in occupancy or address, a task which requires processing across several departments when a person is in receipt of multiple benefits and credits. With perhaps only one department holding the correct information, the system can be prone to errors, time consuming and costly.
Furthermore, the way these systems work independently can be exploited. One of the fastest-growing areas of fraud is the use of false or bogus addresses across a range of claims. Because the systems are not joined up and often use different identifiers – National Insurance number (NINOS), Housing Benefit Reference number (HBNR) and Unique Taxpayer Reference (UTRs) to name but a few – to recognise an individual, these frauds are hard to detect.
Departments such as DWP and HM Revenue & Customs (HMRC) are at the forefront of solving this problem and now run extensive data matching operations to help uncover any fake identities.
Yet, even this work does not prevent fraudsters from continuing to make claims from addresses or properties that no longer exist or are in multiple occupancy with more than one address behind a single front door.
Key actions
Government departments have been fighting fraud for over 15 years and major progress has been made since the Cabinet Office set up a special taskforce in 2010 to tackle the issue. Its report, ‘Tackling Fraud and Error in Government’, published in February, highlights improving the sharing of information and fraud data across the public and private sectors as one of the key actions over the next twelve months.
Leading the way is the National Fraud Authority (NFA) along with the two departments most affected by fraud – HMRC and DWP – which are all working on programmes to assess risk and share public sector information more effectively. Both HMRC and DWP are continuing to develop their Centric and CONNECT data warehouses to identify benefits and tax fraud using sophisticated data matching and risk-based tools. HMRC has plans in hand to invest £425m of savings already generated to reduce welfare fraud and error by £1.4bn per year by 2015.
One of the key barriers to sharing public sector data has been the ‘silo’ based approach to tackling fraud and the difficulty in sharing information on claimants. This has not been helped by the lack of a consistent cross government identifier that can link individuals across public sector systems.
Public Sector Mapping Agreement
Developments at Ordnance Survey to allow geographic information to be shared between all public sector organisations through the Public Sector Mapping Agreement (PSMA)*, along with providing AddressBase, a national dataset of over 36 million address records linked by a Unique Property Reference Number (UPRN), are having a growing impact in the defence against fraud.
AddressBase is produced by combining information from Royal Mail, 348 local authorities in England and Wales, the Valuation Office, the Scottish Improvement Service and Ordnance Survey. This address information is then consolidated’ by Geoplace – a public sector partnership between Ordnance Survey and the Local Government Association (LGA) – and linked by the UPRN to provide an accurate and up-to-date property database that includes residential and commercial properties as well as properties in multiple occupation. The ability to link addresses and therefore individuals across public sector datasets offers a valuable new tool which many public sector organisations are now using to reduce fraud and error in the system.
Local authorities, for example, are using AddressBase and the UPRN to highlight households and organisations that may be avoiding paying council tax or non-domestic business rates.
Leeds City Council recovered nearly £100,000 in additional tax with over £11,000 from a single business unit. A collaborative pilot project, facilitated by the Welsh Government and led by Newport City Council and Cardiff City Council, improved the management of addresses by linking electoral registration, revenue and benefits and other systems. Increased revenue from the identification of missing properties amounted to over £100,000 in Newport and Cardiff and the project has now been extended across Wales, where projected benefits are likely to be over £500,000 and potentially in excess of £7m if extended throughout England and Wales.
Potential benefits
The advantage of using the UPRN was highlighted in a recent Cabinet Office report on the new Electoral Registration Transformation Programme, which is introducing Individual Electoral Registration (IER) for the first time. As part of the pilot programme, data was matched from 22 local authorities against records from eight different national data holding organisations including the Department for Education’s National Pupils Database, DWP’s Customer Information System, and the Driver and Vehicle Licensing Agency.
The report recommended that standardised address and name formats should be adopted across national datasets and specifically for DWP to incorporate UPRNs into its data.
DWP has been quick to identify the potential benefits of the UPRN and is at the early stages of adoption and trial of the OS addressing data within two key areas of business. The UPRN is now embedded within the Tell Us Once programme, a cross-government DWP-led initiative that includes both local authorities and four central government departments and enables people to report births or deaths just once, rather than having to inform each public body separately. Ordnance Survey and DWP are also working closely together to implement AddressBase and use it and geographic information to assist teams in their bid to combat fraud and error.
Adoption of the UPRN across government will help public and ultimately private sector organisations to join up information, share data and prevent fraud and error entering the system. Ordnance Survey will continue to invest in and encourage the adoption of AddressBase and the UPRN across the public sector in the coming months.
* The One Scotland Mapping Agreement (OSMA) is an equivalent agreement operating across the public sector in Scotland
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