Fake Covid support for Luton businesses leads to spike in alerts from anti-fraud service

Activities of criminal gangs - from worldwide as well as in Luton - led to more alerts being issued by the council's shared anti-fraud service last year than ever before, a meeting heard.

“New and emerging often ingenious fraud threats” triggered the extra response, mainly over Covid-19 grant schemes to support local businesses, Luton Borough Council’s audit and governance committee was told.

“Referrals across Luton increased to an all time high,” according to head of Hertfordshire and Bedfordshire shared anti-fraud service (SAFS) Nick Jennings.

“We see that as a real positive as it indicates the public have confidence in the council to deal with fraud and take appropriate action,” he said.

“On awareness, we increased our communications to senior management highlighting new and emerging often ingenious fraud threats that we were seeing, particularly focused on the Covid schemes.

“We issued more alerts in 2020/21 than in the two previous years combined as criminal gangs across the world and more opportunist local residents sought to take advantage of those schemes to divert funds away from genuine businesses.”

The organisation provides a variety of functions for the council from helping to develop policies and processes to deter fraud to fraud awareness training for staff.

“We promote data to help prevent and identify fraud quickly and we work with the local authority to issue public and internal communications to deter fraud,” explained Mr Jennings.

“And we undertake the investigation and prosecution of fraud where other defences have failed us.

“There was a lot of work done around paying out grants to businesses affected by the pandemic. To date we’re not aware of any successful attacks on Luton Council.

“There were attempts. But the work of officers ensured the right money got to the right people at the right time.

“That’s a great example of prevention in practice at a very difficult time for the authority.

“The report covers a lot of the anti-fraud activity SAFS promotes, although there’s just as much ‘business as usual’ work by council officers to help deter and prevent fraud happening in the first place.”

SAFS only missed out on one area of its key performance indicators because the recovery of properties was quite difficult for the council last year.

“It was difficult for us to conduct investigations and the government had made a decision about social housing, with people quite rightly not being evicted from their homes during lockdown,” added Mr Jennings.

“We still closed 92 cases in the year and identified savings of around £360,000, as well as a loss of £1.3m which is all subject to recovery at present.

“So we’re working with council officers to ensure that money is brought back into the authority in a number of ways.

“Our current work since April includes 60 new cases reported to us for investigation.

“We’ve 140 live investigations ongoing with a value of around £1.1m and we’ve closed 25 cases this year, including five properties.”

Labour Dallow councillor Hannah Adrees said: “It looks like some brilliant work there, which I’ve read from the case studies, so well done to you and your team.”