The London Counter Fraud Hub will analyse substantial amounts of data in order to identify instances of fraud committed against local government in the capital. It will also be able to investigate and recover funds on behalf of councils.
The initiative is supported by London Ventures, a partnership between London Councils and EY which is part of the Capital Ambition programme. London Ventures fosters innovation and collaboration between boroughs to deliver value for money for Londoners.
The most recent estimates state fraud costs councils £2.1 billion each year nationwide, including £133 million in council tax discount fraud (1).
Edward Lord OBE, Chair of the Capital Ambition board, said: "The London Counter Fraud Hub is a fantastic example of London local government coming together in its entirety to address a critical loss of revenue at a time of unprecedented budget cuts.
"This has the potential to save local authorities significant sums of money and could prove a very good investment in the fight against fraud."
The hub uses advanced analytics to tackle cross-boundary fraud across London. Data held by participating councils will be fed into the hub before complex analytics are used to detect possible fraud for investigation.
Ian O’Donnell, Executive Director of Corporate Resources for Ealing Council, said: "The London Counter Fraud Hub will realise significant benefits for residents by alleviating the cost of fraud.
"By bringing together all London local authorities and putting in place the latest technology, the hub will be able to maximise the significant opportunities arising from big data and advanced analytics."
The hub has been made possible by a grant from the Department for Communities and Local Government and is led by Ealing Council – though all 33 London local authorities intend to participate. It will also prevent fraud from being committed in the first place by sharing alerts, intelligence, analysis and good practice – allowing councils to eliminate fraud opportunities before they are widely exploited.
Technology enabling fraud to be detected from significant amounts of seemingly unrelated data is already widely used in the insurance industry. Every borough has an internal fraud team, which have detected £100m in fraud over the last two years. This hub will mark a step change in data-sharing between those teams, ensuring that fraudsters that have previous gone undetected are caught.