The National Fraud Initiative in Scotland – podcast transcript
17 May 2006

Simon:  Hello, I’m Simon Ebbett and I’m here to talk to Dave Beveridge about our latest report on the National Fraud Initiative (NFI) – so Dave, what’s this report about?

Dave: Well Simon the NFI in Scotland is largely about saving the public purse money. The NFI helps councils and other bodies such as the PPA identify fraud and error that might be taking place in their financial systems. This includes pensions paid to people who have died and housing and council tax payments that have been paid to people who are not entitled to them. The bodies provide information as part of their external audits, this information is matched by auditors using computers to identify circumstances and inconsistencies that might indicate fraud or error. These examples are then passed back to the bodies who will investigate them.

Simon: OK, and what have you found through the exercise?

Dave: Well, the 2004/05 exercise in Scotland has found £15 million worth of overpayments, fraud and forward savings which are an estimate of pension overpayments that would have continued to have been paid if they hadn’t been found by NFI.

Simon: So what does this all mean for the taxpayer, or the council tax payer?

Dave: Well, in short this means that these amounts can be spent in future on providing services for the public.

Simon: You said a second ago that you found £15 million worth through the NFI – how much of that is money that’s already been paid out and how much is an estimate of savings through the scheme?

Dave: Well, broadly, about £6 million relates to overpayments that have already been made by bodies,  the report actually identifies one example of a case where £31,000 was overpaid and that’s already been recovered. The total amounts actually recovered are not known – certainly not at this stage, but bodies will continue to try to recover these amounts for some time. About £9 million of the £15 million relates to pension payments that we estimate would have continued to have been paid in future if the NFI hadn’t picked them up.

Simon: So how do you come to working out that £9 million figure?

Dave: The £9 million forward savings is based on an industry standard calculation which assumes these payments would have continued until the individual reached the age of 90.

Simon: OK, what happens now with the NFI?

Dave: Bodies can continue to investigate the 04/05 cases until the next NFI commences which will be later on this year. They will also seek recovery of overpayments where they can. The next NFI will make a number of other types of investigations available to councils and this will include checking for the improper use of disabled badges, as these get misused sometimes after the person has died and checking that care home residents aren’t being charged after they have died also.

Simon: Now you worked with the Audit Commission down in England and Wales on this. What was Audit Scotland’s role in this exercise?

Dave: We basically made the NFI part of the audit of the relevant audited bodies. The AC have the infrastructure and the expertise already available to them because of previous exercises that they’ve undertaken and we made use of that by getting them to process the data on our behalf. 

Simon: So the upshot of this exercise is that you’ve identified £15 million – is that all that the Scottish public and public sector are going to get out of this exercise?

Dave: Well not necessarily Simon. By making this exercise and what we’ve made available to the public by publishing it this week, what we’re hoping will happen is that people will realise that there are now mechanisms available to pick these things up, and perhaps there will be a significant deterrent effect from this report being made known more widely.

Simon: Just one last question, a few times during this interview you’ve said ‘fraud and error’ – so this report doesn’t just look at fraudulent cases?

Dave: No, what the NFI does is find anomalies within the system, which aren’t necessarily fraudulent acts, and there can be genuine errors in there. To take the case of the dead pensioners as an example, its possible that a family member mistakenly believes that they are entitled to a dead person’s pension, in other cases the pension might be going into an account that hasn’t been touched for a long time.

Simon: Thanks very much for your time Dave.