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Babergh District Council is committed to protecting public funds and taking all appropriate action to detect and eliminate Housing and Council Tax Benefit fraud.
In that context no distinction is made between planned or deliberate fraud and fraud occurring because of oversight or misunderstanding. Both have the same impact upon public funds.
The Council will investigate any occurrence of potential fraud within the guidelines set out in its Anti Fraud and Corruption Policy or any other relevant legislation.
Any subsequent action taken by the Council however will be appropriate to the circumstances of each case and proportionate to the nature and scale of the offence which has been proven.
The Council is committed to a "strong and inclusive community". The investigation process and any sanctions imposed as a result will not be influenced by ethnic origin, nationality, race, gender, sexual orientation or religion. Anybody involved or affected by an investigation into alleged Benefit fraud will be treated fairly and courteously at all times.
Introduction
The Council's first consideration is whether it is in the public interest to undertake a prosecution. This policy sets out the guidance for officers in arriving at a decision to prosecute and if that is felt not to be appropriate the alternative sanction or action that may be taken..
The Council reserves the right to share information with other bodies administering public funds where the disclosure is solely for the purposes of the prevention and detection of fraud. The Council will act in accordance with the Data Protection Act 1984 and 1998 and follow best practice.
The Council will seek to publicise prosecutions where possible to both demonstrate their commitment to eradicating fraud, to provide a deterrent to those who either intentionally, or unintentionally, gain illegally from the Benefit system and to give confidence to all residents that Housing and Council Tax Benefit is only received by those in need and according to their circumstances.
The Council will, subject to the agreement of other Agencies, undertake to prosecute on their behalf frauds perpetrated against them where the investigation has been carried out within the Council’s Anti Fraud Policy.
The Council also gives permission for other Agencies to undertake prosecutions on its behalf where the investigation has been carried out by that Agency and complies with the Council’s current policy. Decisions on who should prosecute will be agreed subject to any Service Level Agreement applicable.
The Council wishes to deter fraud by using prosecution as a deterrent and believes that failure to prosecute fraud could be construed as condoning such activity. Elected members support the use of prosecutions, formal cautions and administrative penalties in all appropriate cases. Members are not part of the decision making process but will receive reports on the numbers and results of prosecution cases and administrative penalties in committee reports. The Council will take the appropriate disciplinary action against any Member or employee who commits fraud against the Council.
This policy reflects the following aspects of the Council’s vision role, values and priorities
- To provide responsible community leadership
- Recognition of individual diversity within the District
- Treatment of all people with fairness, equality, dignity and respect.
- Open and accountable decision making
- Responsible stewardship of public money
Basic Principles
The suspected offender is innocent until proven guilty and the prosecution has to prove its case beyond reasonable doubt. The Council cannot rely upon assistance from the court or the defendant. In any prosecution the Council will put all relevant evidence to the court and every matter relating to the case.
The Council will ensure that the following principles are adhered to in every case under consideration:-
- Fairness
- Natural Justice
- A proportionate reaction to an offence or offences
- Punishment for persistent or serious offenders
- Recognition of extenuating or special circumstances
- Positive discrimination to ensure no disadvantage occurs because
- English is not the preferred language
- Reduced literacy or numeracy skills
- Physical disability - sight, hearing or mobility
The decision to take a prosecution forward or impose an alternative sanction will be made in two stages:-
Stage 1: An assessment against approved criteria including evidence and any other facts or information that is available.
Stage 2: An assessment made at senior level by the Head of Legal and Administrative Services and the Head of Revenues as to whether the prosecution would be in the public interests and whether all rules in respect of investigation have been followed. If a prosecution is not confirmed as appropriate a recommendation will be made on the alternative action to be taken.
However it is possible that as the result of the checks and balances incorporated in this policy the Council may choose not to proceed with either a prosecution or an alternative sanction. In the event that the Council decide not to impose any sanction the individual or individuals concerned will be advised of that decision immediately it has been made.
This does not necessarily mean that no fraud has been committed. It is simply that the Council do not intend to take any further action.
Clearly it also serves the purpose of an informal warning in that context. If the individual or individuals concerned are subject to another fraud investigation in the future the Council will take account of the earlier decision during that process.
Overpayments of Housing and Council Tax Benefit are by law recoverable from the person or persons whose actions led to the overpayment being made regardless of any action the Council may take in prosecuting offences or imposing alternative sanctions.
Any fines, penalties or costs imposed as the result of a prosecution or sanction are additional to the overpayment identified by any investigation.
It should also be noted the repayment of an overpayment does not prevent the Council taking action where fraud is discovered.
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Prosecution Assessment – Stage 1
The value of the fraud identified by the investigation, is not in itself a measure of the seriousness of the offence. Benefit claimants may decide to omit or not disclose information, not realising that it has little or no effect upon their claim. Not only is this fraudulent it can in certain circumstances mask an underlying entitlement which would give them legitimate assistance to the same extent or, on occasions, beyond their level of entitlement at the time of the offence.
In reaching a decision on prosecution officers will consider the extent to which it could be reasonably foreseen that a fraudulent act was being committed, before considering the potential gain from the offence.
Once the nature and extent of the fraud has been identified the value will be considered. It will not be usual to prosecute in cases where the value is below £1000 unless any of the following factors apply.
Those factors are:
- A previous prosecution, administrative penalty or caution made within the preceding five years.
- Evidence of complex or deliberate fraudulent activity.
- A conspiracy, collusion or the involvement of others in perpetrating the fraud.
- Refusal to co-operate with, or avoidance of the investigative process, where there is clear and substantiated evidence indicating a reasonable probability of fraud.
Where any of those factors apply the case will automatically be considered for a prosecution.
Period of Time
The period over which any fraud has taken place may well determine the seriousness of the offence. In relation to fraud no minimum period is set and each case will be looked at on its merits.
Personal Circumstances of the Offender, Partner or their immediate household.
The following issues are considered in each case:-
Age:
The age of any offender will be taken into account, for example:
Prosecution will not normally be considered for young or elderly people. Generally speaking this means below 18 or over 65. However it is recognised that there may be circumstances where prosecution may be in the public interest. Age is not an automatic protection particularly where deliberate fraud has occurred and a large sum of money is involved
In these cases a discussion will take place between Head of Revenues and the Council’s Solicitor in order to reach a decision.
Mental Health and Physical Condition:
The mental condition of the offender or their partner may mean that prosecution is not desirable in some cases. If this is the case then it will also be important to close the case and investigation as quickly as possible. Examples would include:
If the offender or partner has mental or psychiatric illness liable to worsen then, unless there are extenuating circumstances in an individual case that drive a prosecution, no prosecution should be considered.
If the offender is suffering from such a low mentality that the Court might be sympathetic to them then any prosecution should generally not be considered.
Physical Condition:
The physical condition of the offender or their partner will be taken into account in any decision to prosecute. Examples would include:-
- Is infirm or bedridden.
- If the offender is suffering from a serious or terminal illness.
- Where the physical condition of the offender is likely to make the Court sympathetic to their situation.
- Where the health of the offender’s partner may suffer. This will usually only apply if the partner is suffering from an existing condition that may worsen if proceedings are taken.
Social Factors:
Any factors that may make any prosecution undesirable and would have an effect upon how any court may consider the case. Examples would include:
When the offender is driven to the offence by a tragic domestic circumstance.
Where the prosecutions may create unreasonable trauma, or lead to problems, for children or young people in the household
Where the offender is young and immature. Prosecution of offenders who appear not to be able to deal with the situation and court proceedings is undesirable. As far as possible alternative sanctions and preventative measures should be used to effect the lifestyle changes to protect them in the future.
Mitigation:
The previous paragraphs are a mix of existing circumstances and the impact upon an individual their partner or household if a prosecution is progressed.
The same or similar issues may also have existed at the time of the offence, but are no longer current.
Although the court may or will take account of that in any decision, officers should also take account of this in any potential prosecution.
Ultimately it falls to the court to consider any mitigating circumstances and the balance of discretion is in that arena. However, where it is clear that it is reasonable to react to specific circumstances, prosecution should not continue. It is not in the public interest to take up court time unnecessarily.
In this situation the case will still move to Stage 2 but the case summary will make clear reference to the mitigating circumstances for consideration under the public interest test.
Quality of Evidence:
Prosecution is only possible if there is adequate evidence to support proceedings.
The evidence has to prove the offence took place and can be proven in a court of law before consideration for prosecution is approved.
Voluntary Disclosure:
A voluntary disclosure occurs where an offender voluntarily reveals a fraud which was previously unsuspected and not subject to an investigation. A prosecution will not usually be pursued where a full and voluntary disclosure is made providing there is no apparent likelihood of a subsequent offence and a commitment to repay any amounts obtained by the offence. However this would not prevent other formal action being taken e.g. formal caution in order that this may be recorded in case the claimant commits benefit fraud in the future.
A disclosure is not voluntary if
- It does not constitute a complete admission
- Admission is made because discovery is likely e.g. under investigation
- The disclosure was made during an interview with an investigator
- The disclosure was precipitated by the actions of the Council e.g. the issue of a housing benefit review form, a comment made to a visiting officer during a home visit.
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Prosecution Assessment – Stage 2
Where a potential investigation has complied with the above criteria then the case will be subject to Stage 2. This will be a fundamental review of the case and evidence to see that everything is in order and that to prosecute will be in the public interest. This review will be carried out by the Head of Legal and Administrative Services.
This review will result in either confirmation to take forward a prosecution or if that is inappropriate a recommendation on the alternative action to be taken.
No officer involved directly in the actual investigation or who has personal knowledge of the offender will take part in any official prosecution review.
This review will cover the following areas:-
Flawed Investigation:
A prosecution will not be considered if it is considered that set investigation procedures have not been followed.
Lax Administration:
An office error or absence of internal control procedures can play a part in allowing fraud to take place. If that is found to be the case and that such a failure had a significant effect on the success of the offender then prosecution may not be desirable.
Delay:
This should be considered if an investigation or decision to prosecute is likely to take a prosecution out of time or lead to a criticism by the court. If such a delay has taken place then it will not usually be appropriate to take forward a prosecution. An exception would be where the offender has disappeared or is too ill for interview which has to be delayed etc. An excuse of internal or third party administrative delay is not an excuse however. (Where an external agency is involved e.g. Department of Works and Pensions then any potential for delay should be minimised by operating any Service Level Agreement provisions).
Prosecution Legislation:
There are a variety of statutory legislation under which Benefit fraud can be prosecuted and it will be necessary for a decision to be made at a senior level. A decision will be made as to whether the charges laid are summary or indictable depending upon the legislation chosen.
Overall Review – Public Interest:
Once a potential prosecution has been reviewed by the Head of Legal and Administrative Services, the Head of Revenues will undertake a final review of the evidence, the investigation and all potential mitigating factors. A decision will then be made in the light of all the facts and evidence as to whether it will be in the public interest to prosecute. Where all the facts etc. are in order and it would be in the public interest to prosecute then a prosecution will result.
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Alternative to Prosecution – Benefit Fraud Cases
Administrative Penalty:
An administrative penalty is the offer to a person to agree to pay, in the manner specified by the Secretary of state, a financial penalty if the person, by act or omission, has caused benefit to be overpaid to them. The value of the penalty is fixed at 30% of the overpayment. An offender may be offered this as an alternative to prosecution.
The penalty can only be offered in respect of overpayments that have accrued after 18 December 1997 and relate to a single benefit.
There must be grounds for instituting a prosecution against the offender relating to the overpayment for which the penalty is being offered. All the factors in Stage 1 and Stage 2 of Prosecution Assessment must have been met and an interview under caution completed. There does not however have to be an admission of guilt by the individual concerned merely that a prosecution is possible and viable.
An administrative penalty has no standing in the Courts but it is admissible to state that an administrative penalty has been offered and refused in any prosecution resulting from a refusal to accept an administrative penalty.
The penalty will be offered in a situation where natural justice is applicable. In other words the penalty should not be disproportionate to any fine that would be imposed in a court of law.
The imposition of an administrative penalty should not lead to or exacerbate debt problems for individual or household concerned. If serious debt problems exist which would worsen if a penalty is imposed alternative sanctions should be considered. Particular care may be required with this aspect. Offenders may react favourably to the offer of an administrative penalty because of the possibility of a prosecution, without real thought to their financial position. The Council may not therefore follow though on the offer if it is felt that the outcome is simply to create a further problem elsewhere.
An Administrative Penalty has to be offered in accordance with the guidance issued by the Secretary of State and can only be offered by a Principal Officer or above.
Formal Caution:
A formal caution can only be considered where a proven criminal offence has taken place, and the subjects admit that he/she has committed the offence.
A caution is formally recorded in writing and can be referred to later in conjunction with subsequent offences. Where a caution is made and accepted, three copies will be made. One copy to be held by the Council, one by the Department for Work & Pension and one to be passed to the offender.
The caution must be compliant with the Police and Criminal Offences Act and all Home Office guidance.
A formal caution can only be given by a Principal Officer or above.
If an offender refuses to admit the offence or accept a caution the Council may consider a prosecution. If it appears to the officer administering the caution that the offender is flippant or does not recognise the formality or significance of the event the caution interview may be suspended and the Council may also consider a prosecution.
Prosecution Policy Review Process
The policy will be kept under review by officers to take account of any legislative changes and results from any analysis of prosecutions undertaken. The Prosecution Policy will be referred to the Overview and Scrutiny Committee annually for formal comment and subsequent change and approval.
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