Counter fraud and corruption strategy

Fraud

2.1. The London Borough of Bromley defines fraud as “any intentional false representation, including failure to declare information or abuse of position that is carried out to make gain, cause loss or expose another to the risk of loss”. (Chartered Institute of Public Finance and Accountancy)

2.2. Under the Fraud Act 2006, fraud can be committed in the following ways:

• False representation – making a false representation with the intent of making a gain or causing a loss. Examples include providing false information on a social housing or job application, or in order to obtain grant money or other funds for the council.
• Failing to disclose information – failing to disclose information with the intent of making a gain or causing a loss. Examples include failing to disclose a change in circumstances which may impact on eligibility for Single Person Discount or Small Business Rate Relief.
• Abuse of position – if a person in a position of trust abuses that position with the intent of making a gain or causing a loss. Examples include using a corporate purchase card for personal expenditure, diverting council funds into a personal bank account or raising invoices for services that the council has not provided.

2.3. Under the Economic Crime and Corporate Transparency Act 2023, the council has a duty to actively prevent fraud by ‘associated persons’* which is intended to benefit the council. The offence of ‘failure to prevent fraud’ holds authorities to account for their fraud prevention measures and the council may be criminally liable if an ‘associated person’ commits a fraud intending to benefit the council and the council did not have reasonable fraud prevention procedures in place.

Corruption

2.4. Transparency International UK defines corruption as ‘the abuse of entrusted power for personal gain’. This can include the offering, giving, soliciting or acceptance of an inducement or reward, which may influence the action of any person to act inappropriately.

2.5. Key corruption legislation relevant to the council includes:

• The Bribery Act 2010 (see Anti-Bribery Policy).
• The Money Laundering Regulations (see Anti-Money Laundering Policy).
• The Criminal Finances Act 2017.

2.6. The Criminal Finances Act contains a corporate failure to prevent criminal facilitation of tax evasion and the council must be able to demonstrate that it has taken reasonable measures to prevent the facilitation of tax evasion by associated individuals and companies.

*A person who is an employee or agent of the council, or a person who otherwise performs services for or on behalf of the body (for example, agency worker, contractor, volunteer).