Public Sector - Anti-fraud pilot goes on

The Audit Commission has recommended a three-year extension to a pilot scheme to crack down on benefit fraud even though it only secured one prosecution in its first three years.

Designed to explore the need for a unit to examine organised housing benefit fraud across all London boroughs, the 20-man London Organised Fraud Investigation Team (Lofit) was heavily criticised for its results by the commission.

The team, which was allocated a #3m budget over three years, took 16 months to start operating and was criticised in the report for poor record-keeping and management.

In its report, the commission said that from 98 cases referred to Lofit, the unit had only managed to achieve one prosecution and had only stopped benefits to two individuals so far. Five other cases were referred to other agencies and 36 were rejected.

Among its concerns about the unit’s operations, the commission found that no search warrants had been executed and no records kept of the number of people involved in prosecutions, records seized or where benefit was stopped but without prosecution.

The extensive use of surveillance vehicles for other purposes was questioned by the report. The commission urged their use to be decided by proper procedures to ‘avoid impropriety or the appearance of it’. Staff had been using the cars to attend meetings and training courses, as well as taking them on days off and at weekends.

Despite its criticisms, the commission’s report said the pilot scheme should given an additional three years to prove its worth once the problems with its management structure had been ironed out. ‘It is possible to conclude that a role does exist for Lofit and that it will be able to investigate and prosecute cases which would not otherwise have bee tackled’.

A spokesman added: ‘The commission stands by its findings. There are some outstanding issues of poor management, but we think the organisation is a good thing.’

The report also recommends the establishment of a second pilot scheme elsewhere in the UK should be considered to compare results with the Lofit project.