CONTENTS

3 Background

3 Counter fraud management

4 Multi-agency work

4 Investigative work

6 Appendix A: Summary of investigative work

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Background

1 Fraud is a significant risk to the public sector. Fraud is the most common offence in the UK, accounting for approximately 41% of all crime[1]. The National Audit Office estimates that fraud and error cost the taxpayer between £55 and £81 billion in 2023/24 and that only a fraction of this is detected[2]. Financial loss due to fraud can reduce a council’s ability to support public services and can cause reputational damage.

2 Veritau delivers a corporate fraud service to the Council which aims to prevent, detect and deter fraud and related criminality. The counter fraud team investigates allegations of fraud, plans and take part in counter fraud campaigns (eg the National Fraud Initiative), undertakes fraud awareness activities with staff and the public, and maintains and updates the Council’s counter fraud framework and associated policies.

3 The purpose of this report is to update the Committee on counter fraud activity in 2025/26 to date.

COUNTER FRAUD MANAGEMENT

4 The counter fraud team support the Council’s whistleblowing arrangements by receiving reports from people raising concerns and maintaining the central log of whistleblowing reports. Each year we work with the communications team to raise awareness of whistleblowing procedures with employees. The latest campaign took place in June as part of World Whistleblowers’ Day.

5 To help raise awareness with Council officers, we periodically deliver bespoke training to services. In April, the team provided training sessions to officers in revenues and benefits roles and delivered a further session in August to new starters joining the benefits service.

6 Veritau is an active participant in regional and national counter fraud groups. In May, we represented the Council at a liaison meeting between councils, the Public Sector Fraud Authority (PSFA), and Tom Hayhoe, the recently appointed Covid Counter-Fraud Commissioner.

7 The Local Government Transparency Code 2015 requires councils to publish data every year on counter fraud work. Veritau provided officers with the relevant data for work completed in 2024/25 which the Council then published online.

8 Veritau shares alerts on fraud threats identified by partners in the counter fraud community, including the National Anti Fraud Network (NAFN). When Veritau identifies threats that could affect other local authorities then a threat report is made so all NAFN members are aware. Recent alerts from NAFN have included fraudulent cheques being used to make payments to councils, details of a person who was found committing career polygamy fraud by working for multiple authorities at the same time, and details of a successful mandate fraud where a NAFN member council made a £230k payment to fraudsters.

MULTI-AGENCY WORK

9 The National Fraud Initiative (NFI) is a large-scale data matching exercise that involves all councils and other public sector bodies in the UK. The work of the NFI is overseen by the Public Sector Fraud Authority (PSFA). Between December 2024 and March 2025, the PSFA released a number of data matches covering a range of services. The Single Person Discount matches compare the Council’s council tax database to datasets held by other departments and authorities, including the electoral roll. A risk assessment has identified 94 council tax accounts for further detailed checks.

10 In August, the PSFA announced that the National Fraud Initiative will reintroduce matching related to adult social care payments. Veritau will work with the Council to collect and submit data later this year and review the outputs for potential issues requiring action.

11 The counter fraud team has established a working relationship with the regional Department for Work (DWP) investigation team. Where a resident is awarded support by both the Council and DWP, the counter fraud team can jointly investigate. We currently have 10 joint working investigations ongoing with the DWP.

INVESTIGATIVE WORK

12 Since 1 April 2025, Veritau has received 257 referrals for suspected fraud relating to a range of service areas. These concerns are raised by Council officers, members of the public, and external agencies. Each report is reviewed to determine the most appropriate response.

13 To date, the team has concluded 33 cases and has 82 ongoing investigations. Warnings have been issued in five cases where individuals had incorrectly obtained or received council tax discounts. An application for a school place was also stopped when it was discovered that incorrect home address details had been provided by a resident who lived outside of North Yorkshire.

14 Investigative work has helped the Council to achieve £144k in savings. Counter fraud savings[3] are tracked by monitoring actual repayments to the Council following fraud investigations and calculating the value of stopping ongoing fraud.

15 A summary of investigative work can be found in appendix A, below.

APPENDIX A: SUMMARY OF INVESTIGATIVE WORK 2025/26

The table below shows the success rate of investigations and levels of savings achieved through counter fraud work in 2025/26.

2025/26 actual

(to 31/08/25)

2025/26 target

(full year)

Amount of actual savings (quantifiable savings - eg repayment of loss) identified through fraud investigation

£144,812

£225,000

% of investigations completed which result in a successful outcome (for example payments stopped or amended, sanctions, prosecutions, properties recovered, housing allocations blocked)

58%

30%

Caseload figures for the period are:

	2025/26 (at 31/08/25)
Referrals received	257
Number of cases under investigation	82
Number of investigations completed	33
Number of verifications completed[4]	3

Activity	Work completed or in progress
Fraud detection and investigation	The service promotes the use of criminal investigation techniques and standards to respond to any fraud perpetrated against the Council. Activity to date includes the following: · Adult Social Care fraud – fraud in this area relates to deprivation of capital, financial abuse, direct payment fraud, and abuse of position (eg by a power of attorney). Sixteen cases are ongoing, and two have been completed to date. An investigation helped to secure the repayment of £134k in relation to incorrectly obtained care fees. · Council Tax and NNDR fraud – Council Tax and NNDR fraud often involves false applications for discounts and exemptions from liabilities. The team has completed five investigations. A warning was issued in one case, where an individual had received a council tax exemption incorrectly. Eleven cases are ongoing. · Council Tax Reduction fraud – fraud in this area can occur when people claiming a reduction provide false information when they apply or fail to declare changes to their circumstances relating to income, capital, or household occupation. There are 29 ongoing investigations into claims for Council Tax Reduction. Six have been completed and these have resulted in four people being issued with warnings. · External (or third party) fraud – fraud in this area can relate to financial crime or error perpetrated against the Council, eg mandate fraud, cybercrime, or supplier over charging. The team has 5 active investigations. · Housing fraud – housing fraud can relate to the sub-letting of council properties and potential abuse of the housing allocation system. The counter fraud team are investigating six cases in this area. Three investigations have been completed, into suspected subletting and application for housing funding. No fraud was identified in any case. · Internal investigations – Cases in this area include matters raised under the Council’s whistleblowing policy. The team has completed 15 investigations, 8 of which resulted in information being provided to support services. There are 13 ongoing investigations. · Local assistance fund – this funding provides support for household goods and necessities to those in need. The counter fraud team investigates the submission of fraudulent applications and misuse of the scheme. Two investigations have been completed in this area and no fraud was found in either case. · School admissions – Veritau supports Council officers to verify applications for school placements where there is a discrepancy in home address records that affect school catchment areas. Three investigations have been completed this year. One placement was stopped as a result of our findings, and two applications were upheld. The team has one investigation ongoing.

Activity

Work completed or in progress

Fraud detection and investigation

The service promotes the use of criminal investigation techniques and standards to respond to any fraud perpetrated against the Council. Activity to date includes the following:

· Adult Social Care fraud – fraud in this area relates to deprivation of capital, financial abuse, direct payment fraud, and abuse of position (eg by a power of attorney). Sixteen cases are ongoing, and two have been completed to date. An investigation helped to secure the repayment of £134k in relation to incorrectly obtained care fees.

· Council Tax and NNDR fraud – Council Tax and NNDR fraud often involves false applications for discounts and exemptions from liabilities. The team has completed five investigations. A warning was issued in one case, where an individual had received a council tax exemption incorrectly. Eleven cases are ongoing.

· Council Tax Reduction fraud – fraud in this area can occur when people claiming a reduction provide false information when they apply or fail to declare changes to their circumstances relating to income, capital, or household occupation. There are 29 ongoing investigations into claims for Council Tax Reduction. Six have been completed and these have resulted in four people being issued with warnings.

· External (or third party) fraud – fraud in this area can relate to financial crime or error perpetrated against the Council, eg mandate fraud, cybercrime, or supplier over charging. The team has 5 active investigations.

· Housing fraud – housing fraud can relate to the sub-letting of council properties and potential abuse of the housing allocation system. The counter fraud team are investigating six cases in this area. Three investigations have been completed, into suspected subletting and application for housing funding. No fraud was identified in any case.

· Internal investigations – Cases in this area include matters raised under the Council’s whistleblowing policy. The team has completed 15 investigations, 8 of which resulted in information being provided to support services. There are 13 ongoing investigations.

· Local assistance fund – this funding provides support for household goods and necessities to those in need. The counter fraud team investigates the submission of fraudulent applications and misuse of the scheme. Two investigations have been completed in this area and no fraud was found in either case.

· School admissions – Veritau supports Council officers to verify applications for school placements where there is a discrepancy in home address records that affect school catchment areas. Three investigations have been completed this year. One placement was stopped as a result of our findings, and two applications were upheld. The team has one investigation ongoing.

[1] Progress combatting fraud (Forty-Third Report of Session 2022-23), Public Accounts Committee, House of Commons, published March 2023.

[3] Counter fraud savings consist of money recovered during the course of the year (debts may have been calculated in previous years as well as the current financial year), the value of applications that would have been successful, eg Right to Buy, and 12 months of savings where an ongoing fraud has been stopped through the work of the counter fraud team.

[4] Verification cases are reviews of applications for school placements.