Councils fight fraud

The row over the anti-fraud data matching initiative in local councils took a new turn this week when it emerged that Unison had tried to take Nottingham City Council to court for failing to consult with it before passing staff payroll information to the Audit Commission for data matching.

The council settled the case before the hearing, but left the issue unresolved.

Last week Computing revealed how a new report - dubbed flawed by the Audit Commission - claimed misunderstanding over guidelines and legislation has lead some councils to break the law during data matching. More than 300 local authorities are already taking part in National Fraud Initiative data matching exercises.

Last year the Department of Education commissioned Price Waterhouse to study the feasibility of setting up a national database to combat student grants and loans fraud. Computing understands the report estimates student fraud at #34m over four years.

Whitehall will not make a decision on setting up the database until the Audit Commission has reported on the success of the current council matching exercises.

This report is due in October, but the Audit Commission's director of audit support, Paul Vevers, said u15m-worth of fraud, of all types, has already been detected. 'We have to see how these modern techniques can be refined in the fight against fraud with the proper regard to data protection legislation,' he said.

The Department of Social Security will get the chance to use its new data matching powers to slash annual u3bn housing and council tax benefit fraud losses when the Social Security Administration (Fraud) Act comes into effect on 1 July. DSS inspectors will be able to compare their data with that of the Inland Revenue, Customs and Excise, the Passport Agency, the Home Office immigration service, and local councils.

Civil rights group Liberty will challenge the act, claiming that it breaks the European Convention on Human Rights. The DSS is hoping to allay concerns about the act with the promise that no data matching will take place until a code of practice has been published.

COMPARING DATA

Benefits fraud meets its match

Data matching compares council databases for student grants and loans, council tax and housing benefit, and sometimes staff payroll. By checking names and addresses against those in different claims at the same or other councils, multiple claims by fraudsters can be detected. Councils voluntarily join the scheme and send the databases they want to compare to the Audit Commission, which uses software such Access, Idea and Post Office Address Files to find 'matches'. These are then returned to the authority for investigation. The Commission's work costs each council between #600 and #1,000.

See also 'Union scores moral victory over council data match'.