The Prosecution Policy

What is it?

Housing

1. Introduction

1.1  Exeter City Council approved the adoption of an Anti-Fraud and Anti-Corruption Strategy on 16 June 1998.  The purpose of the Strategy is to clearly state its commitment to prevent, detect and investigate fraud and corruption, and take appropriate recovery action wherever possible.

1.2    The Government has introduced a range of measures designed to identify and reduce Benefit fraud.  The measures include: the Verification Framework, the National Fraud Initiative, and the Housing Benefit Data Matching schemes.

1.3   The City Council has invested resources in establishing and strengthening a team of officers dedicated to identifying, investigating and preventing cases of Benefit fraud.  In addition, all Benefits staff receive regular fraud awareness training enabling them to take a vital role in detecting attempted fraud at source.

1.4   Government Performance Indicators have been set requiring every local authority to adopt a written strategy for combating Housing Benefit fraud and error.  Operating a Prosecution Policy is one of the initiatives a local authority should adopt in order to meet the Government's criteria.  An effective prosecution policy enables all of these schemes and initiatives to meet their potential.

2.  Administering the Prosecution Policy

2.1  When deciding whether to prosecute or not, the Council must consider relevant legislation, such as the Theft Act 1968, the Social Security Administration Act 1992 and the Human Rights Act 1998.  Cases considered for prosecution include those where incorrect or incomplete information is provided by claimants or others in an attempt to claim Benefit fraudulently.

2.2  Prosecutions are governed by strict codes of practice.  For example, cases brought under the Social Security Administration Act 1992 have a three-month time limit from the date of discovery of the offence or twelve months from the period of the overpayment for information to be laid before the Court.  This means that the decision to take prosecution action must be made quickly in order to ensure that the Council complies with the relevant legislation.

2.3  The Council can make use of a number of sources to prosecute individuals found committing Benefit fraud.  These include the Council's Legal Service, DWP solicitors, external solicitors and the Crown Prosecution Service via the police.  It is envisaged that cases selected for prosecution will, in the first instance, be referred to the Council's Legal Services for court action.

3.  Subsidy

3.1  The Government provides subsidy for local authorities to investigate allegations of benefit fraud.  This is included in the Governments benefits administration grant given to Exeter City Council and is based on the number and type of benefit claims the council administers.

3.2  An effective system needs to be put in place to ensure that all decisions on matters relating to prosecutions and sanctions are made only after considering fully the facts and circumstances of each case.  To achieve this, the following system will apply:

4.  Procedures

4.1    Each case will be passed to the Recovery and Investigations Manager who will decide whether to undertake further investigations or not.

The Recovery and Investigations Manager will take into account the following factors: 

a) The amount of money obtained

It may not be practical to prosecute where the amount fraudulently obtained is less than the cost of any proceedings.  However, the amount of the overpayment may be disregarded in cases of persistent offenders or where a number of other factors apply.

Where the overpayment is in excess of £2,000 prosecution will be pursued.

Where the loss is below £2,000, the matter may be dealt with by way of an Administration Penalty or Formal Caution.

Note: The Council reserves the right to prosecute any fraudulent act, regardless of amount.

b) The duration of the offence

A fraud, which is potentially serious but has been discovered at an early stage, should be considered for prosecution irrespective of the overpayment actually caused.  This is of particular importance if there is a prevalence of similar fraud in the area. 

c) Previous instances of fraud

Fraud established in the past, including cases where prosecution action has not been taken, should be noted as these clearly demonstrate that the offender was aware of circumstances which should be reported and which would affect Benefit entitlement.

d) The offender's physical or mental condition

Where evidence is available to support the existence of a physical or mental debility, prosecution may not be desirable; these may include the following examples:

• suffering from nervous or stress related problems;
• suffering from an age related illness e.g. senile dementia;
• suffering from hearing, sight or speech problems (and therefore may not have understood the questions, may not have been able to see the form properly, or may find court proceedings especially traumatic);
• of such a low mentality that the Court may consider the complexity of Social Security schemes as a factor in the fraud
• suffering from a terminal or severe illness, whether physical or mental;
• pregnant, and either the expected due date is within three months, or the offender is not in good health. In this event, consideration should be given to deferring proceedings until after the offender gives birth.

Consideration should also be given to the health of any partner, e.g. where the partner suffers from conditions that will be exacerbated by the trauma of prosecution. 

e) Social factors

Consideration should also be given to, for example:

• whether the offender was driven to commit the offence by a difficult domestic situation;
• whether there exists the possibility of mental injury to a third party, for example where an adopted or fostered child would be made aware of their true status.
• whether the offender could be dealt with more effectively without redress to proceedings, e.g. where the offender is young or immature, although youth in itself is not a good enough reason not to instigate proceedings.

f) Voluntary disclosure

This will only occur where the claimant, of their own free will, reveals a fraud of which the Benefit Section has been unaware.  It does not apply to cases where, for example:

• the disclosure is prompted by a belief that the fraud would have been discovered;
• the claimant has discovered that they were being investigated by a fraud drive;
• the disclosure was prompted by, for example, a verification visit. 

g) Suitability of evidence

Substantive evidence is essential for conviction, prosecution will not be justified where there is insufficient or inadequate evidence, e.g. because of unreliable or unsuitable witnesses.  All evidence that forms the basis of a prosecution must be admissible and sufficient in order to obtain a conviction in accordance with current Regulations and Acts.

Procedures should ensure that clear, concise and complete notes are made at every stage of an investigation.  Even if the decision is made not to prosecute, the evidence may be used to decide whether to prosecute should there be any subsequent occurrences. 

h) Internal procedures and delays

Where there has been a clear failure or delay in undertaking the investigation for whatever reason, consideration of whether prosecution is appropriate should take place.  This may also include failures in administration which have allowed the fraud to succeed, for example:

• where Benefit has been paid on incomplete information;
• where the claim form has been badly completed by an Interviewing Officer;
• where there has been failure to observe obvious flaws in a statement or document.

Where there has been an unacceptable delay, caused by the Council, in the investigation it would not be desirable to prosecute. (Note: delays caused by the offender will be accepted by the Court.)

The case will then be passed to the Housing Benefit Manager, or in their absence, the Assistant Director Finance, who will determine whether the prosecution should proceed. 

The Chief Executive and the Strategic Director will be informed immediately of all cases where action is being taken and those, which it is considered, might attract publicity.  For cases which might attract publicity, the Public Relations Officer will also be notified. 

Where the Council is prepared to prosecute, however prosecution is not felt to be the most appropriate course of action; for example, the overpayment is under £2000, the alternative sanctions will be offered.

a) An Administrative Penalty

This is a fine equivalent to 50% of the recoverable overpayment or £350 whichever is the greater (up to a maximum penalty of £2000).  An Administrative Penalty cannot arise until a Benefit overpayment has been properly determined under the Regulations to be recoverable and the person from whom recovery is sought has been properly notified.  The Council then has discretion to invite the person concerned to pay a penalty where it is satisfied that:

• the overpayment was caused by an act or omission on the part of that person; and
• there are grounds for bringing a prosecution against that person for fraud relating to that overpayment under the Social Security Administration Act or any other enactment.

The person may be offered the choice of agreeing to pay an Administrative Penalty as an alternative to taking criminal proceedings against him/her. 

b) A Formal Caution

A Formal Caution is an official warning issued to a person who has admitted to defrauding the Council.  The caution is held on record for five years and can be used as evidence against the claimant if fraud is committed within this five-year period.

It should be noted that:

• some cases will not fall easily into any of the categories outlined above. However, every case will be considered on its merits and action taken as appropriate.
• this Prosecution Policy is not designed to be a definitive document, and any prosecutions will always have deference to an individual's circumstances.

4.2  Loss of Benefit Sanction

If a customer is convicted of an offence in court or accepts an administrative penalty or caution as an alternative to prosecution, any social security benefit received currently or in the future may be subject of a reduction or withdrawal in accordance with the Social Security (Loss of Benefit) Regulations 2001, as amended by the Social Security (Loss of Benefit) Amendment Regulations 2010.

4.3    The Council will, in cases that have been jointly investigated with the Department for Work and Pensions (DWP), support the DWP in any sanction action they deem appropriate.

5.  Fraudulent Claims by an employee or Member of the Council

5.1  Where an investigation is undertaken on an employee or Member of the Council, the Recovery and Investigations Manager will immediately report the matter to the Assistant Director Finance, and the Assistant Director Business Transformation, who in turn will inform the Chief Executive, and the Monitoring Officer as appropriate.

5.2  In addition to the above procedures, an employee may also be subject to the Council's Disciplinary Procedures and a Member referred to the Standards Board for England or the Council's Standards Committee as appropriate.

Dated: April 2013

Date of next review: April 2014

Assistant Director Finance