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Fraud risk for Universal Credit is an early warning for shared services

26 April 2013


The recent publicity about the potential for fraud in the Government’s flagship Universal Credit (UC) scheme generated a rash of headlines, both in the specialist and general media.

However, relatively few of the media stories got down to the ‘nitty gritty’ of why the system was so open to fraud, although the Communities and Local Government Committee’s report ,which sparked the interest in the first place, made clear where the problem lay. A distinct lack of integration.

The report found that UC’s current fraud detection system is unable to tell when multiple individuals make a housing benefit claim on a single property. This is because, as one council told the Committee, the UC software will not work from, or facilitate communication between, local authority systems so it isn’t able to detect automatically – as current systems do – when multiple claims were made.

In response the Government says it is at the early stages of developing a new fraud detection mechanism, IRIS, which will then be built into UC. However as committee chairman, Clive Bettes, notes the embryonic nature of this project is “extremely concerning given the advanced state of implementation”.  Better integration with local systems may have made this development unnecessary in the first place.

Mr Bettes’ report is also at pains to point out that “sharing information effectively through ICT systems will be critical to the implementation of welfare reform”. He then rather wirily remarks that “some councils have been able to handle data transferred to them by DWP through ATLAS* but this may have been more by luck than planning.”

I would absolutely agree with Mr Bettes’ analysis that integration is essential in the successful implementation of welfare reforms, and I would also venture that the findings of his report can be put to use in many other areas of local government.

The importance of integration is only set to increase and there are two main drivers for this – firstly authorities, driven by the need for efficiency, are increasingly encouraging citizens to ‘self-service’ via websites, thus driving the need for front and back office integration. Secondly, and more fundamentally, the rise in shared services and the incumbent need to share data with others – be it the NHS, DWP, the police or other local authorities -  will generate a wave of fresh, and increasingly complex, integration projects. Let’s hope that the lessons from the UC experience can be applied, and applied fast, so we can sidestep the pitfalls of shared services and get on with realising the benefits.

Declan Grogan is managing director of integration and mobile working specialists, NDL

*Automated Transfer to Local Authorities