£7.1 million of fraud and payment errors have been identified by the latest National Fraud Initiative exercise in Wales.
However, the impact of the exercise heavily relies on participating organisations investing time and effort to assess and review data matches effectively, said Audit Wales.
The National Fraud Initiative (NFI) is a biennial UK-wide counter-fraud exercise that helps prevent and detect fraud by sharing and matching sets of data electronically. For Wales, the most recent exercise saw 49 organisations take part.
Audit Wales said the outcomes for Wales from NFI 2022-23 are £0.6 million more than in 2020-21, which is primarily because of a rise in the number of fraudulent or erroneous claims for housing benefit and council tax single person discount. However, falls in other areas, such as a fall in the cancellation of blue badges, partly offset these increases.
Of the £7.1 million reported outcomes, 97% are from local authority data matches relating to council tax, housing benefit, blue badges, housing waiting lists, and pensions, it said.
The success of the NFI depends on how well participant bodies assess and review data matches, and then record the outcomes. Some bodies are doing good work on this, said Audit Wales, but it said its review of data matching reports highlighted inconsistencies in local follow-up arrangements and some large variations in outcomes between similar participants.
As well as identifying, recovering, and preventing financial loss, the NFI delivers wider qualitative benefits. It can provide assurances over, and identify opportunities to improve, the effectiveness of financial and other administrative processes and procedures.
While not all participants will necessarily see significant positive outcomes themselves, one key benefit of a UK-wide data matching exercise is that it enables matches between bodies and across national borders, Audit Wales said. Data provided by Welsh participants for NFI 2022-23 helped bodies outside Wales identify outcomes worth £0.2 million. Similarly, data from other UK participants has helped identify outcomes in Wales.
Audit Wales said it was continuing to look for opportunities to raise the profile and increase the scope and coverage of the NFI in Wales as part of its wider commitment to fraud analytics work.
Auditor General Adrian Crompton said:
“I have commented previously that while the debate about public finances often focuses on spending cuts and/or raising taxes, relatively little is said about fraud and error. Yet it continues to be a blight on public services.
“Realising the benefits of the NFI relies on participating bodies investing time and effort to assess and review data matches effectively. Quantifying the overall impact also relies on bodies recording their outcomes. Most participants display a strong commitment to the NFI, but I remain concerned that this is not always the case.
“As the next NFI round rolls out, Audit Wales staff will increase their engagement with participating bodies to raise awareness, promote active participation, and understand better how bodies are assessing and reviewing matches.”
Cumulative outcomes for Wales are now at £56.5 million since the initiative started in 1996. Across the UK, cumulative NFI outcomes are now at £2.9 billion.
NFI 2024-25 is now underway. NFI participants are starting to submit data for matching, and match reports will be available around the end of 2024.
