Data Matching by the Audit Commission resulting in people being flagged as 'high risk fraud cases' on the basis of broad statistical reasoning

The request was successful.

Dear Sir or Madam,

Following the change in Audit Commission Powers to use data matching and the introduction of a new Statutory Code of Data Matching Practice, the Home Office issued a circular in which it stated, following perhaps the explanatory notes attached to the legislation, that ‘matches should not occur’.

The Code of Practice and associated statute law say that where a match is found it indicates that there is ‘potential fraud’, and that a match indicates that ‘there is an inconsistency requiring investigation’.

The Audit Commission compares

a) (incomplete and approximate - and quite lawfully so) lists of residents having their main abode at each address sent in by council tax departments with

b) lists of people on the electoral register for that address (which may lawfully include both people who fall to be disregarded for council tax purposes, and people whose ‘main abode’ is not at that address, eg grown up student children away at university.)

Where a person is not on the electoral register but not on the council tax list of residents, that so-called ‘match’ is classified as a ‘high risk’ fraud case, and councils which do not investigate using usual policies and practices for the investigation of fraud and error - as stated in the Code of Conduct - risk adverse public interest reports from their auditors.

The Audit Commission states that this match does not indicate lack of entitlement or failure to inform the council of material changes in circumstances as required by the Council Tax law. In other words, neither the taxpayer nor the Council has done anything wrong.

In view of the comments circulated by the Home Office about Audit Commission Data Matching, my questions are:

1 What is your understanding of Section 11 Discounts and the rules governing their administration, assessment, collection and billing? Please include the statutory assumptions relating to rate and amount upon which the bills must be law be based.

2 What were your grounds, if any, for asserting that ‘matches’ on this particular exercise ‘should not occur’?

For example, was this assertion based upon a particular view of the way in which councils should carry out their statutory duties to ascertain each year before making any calculations whether any discount should apply, or upon a general view of the significance of data matching exercises carried out by the Audit Commission, or made upon the basis of some other reasoning?

3 a) In your view, is it fair to describe people on those hit lists as being, at the time of data matching ‘claiming to live on their own’. (Ref their limited obligations to inform the council only if they are no longer entitled to a 25% discount or if the amount of discount deducted is too great of which each demand notice must by law inform them)?

b) Would councils making this assertion be in breach of the Code of Practice prohibiting assumptions without investigation or otherwise acting unfairly or in breach of the human rights of the individuals on the NFI hit lists? NB I have documentary evidence that some councils are making this assertion in reports issued to elected members and published on line.

4 In your view, in a case where council officers reported to the council that they had been sent a 'list of fraudulent cases' to investigate would this constitute a breach of the Code of Data Matching requirement that no assumption should be made as to fraud without an investigation? I have documentary evidence that council officers are making this statement in reports issued to elected members and published on line.

5 Would you agree with the policy position stated by the Audit Commission that if the Audit Commission was breaching the Code of Practice by issuing guidance to councils on how to investigate matches this should be kept secret on the grounds that this information would enable frauds to evade detection?

6 Has the Home Office considered the possibility that people will be deterred from registering to vote by the probability that they may end up being flagged as a high risk fraud case by the Audit Commission if they do?

Yours faithfully,

K Hodgkinson

K Hodgkinson left an annotation ()

To clarify: I mean that innocent honest and entitled people may be deterred from registering to vote by the knowledge that their electoral register information may be processed with the result that they end up being suspected of fraud which they could not commit if they tried.

For example, some councils are already urging people to get students at universities elsewhere off the electoral role to avoid false matches arising!!!

I took this step myself, but only after being officially suspected of fraud purely because I told the council a 17 year old lived at my address. I was not claiming to 'live alone' and had fully carried out all my statutory obligations in respect of the 25% discount I was receiving.

K Hodgkinson left an annotation ()

In fact, honest people find themselves presented with the name and date of birth of their schoolchildren/university students, for whom they are still lawfully in receipt of child benefit, and being required to 'explain' it as if it were some evidence against them in a fraud case. Failure to do this results in the issuing of backdated council tax for money they do not owe.

The explanation 'It is against the law not to fill in the electoral register form' does not appear to be the sort of explanation the council tax fraud people are looking for.

The explanation 'I am fully entitled to the discount which you deducted from my bill on the statutory assumption that the same rate would apply for the whole year' doesn't wash either.

However, both are totally reasonable 'explanations'.

As yet the Audit Commission has not explained why innocent people should be required on pain of punishment with bills for money they do not owe to 'explain' perfectly innocent information or to eliminate themselves from a fraud enquiry when nobody has one shred of evidence that they have committed a fraud.

Dear Sir or Madam,

I realise I should have phrased this in terms of a request for all relevant documents, including, for example, any representations made to you by the Audit Commission in respect of data matching generally and in respect of this match, and any internal briefings and policy documents etc on the subject of Audit Commission data matching or on data matching involving the full electoral register.

I apologise for being too vague

Yours faithfully,

K Hodgkinson

Home Office

Mr K Hodgkinson,

Reference : T18112/9

Date: 22-Oct-2009

TREAT OFFICIAL CORRESPONDENCE

Thank you for your e-mail of 15/10/2009 12:13:13 PM regarding.....

The matters you have raised are the responsibility of Communities & Local
Government.

We have therefore transferred your e-mail to
[email address], who will arrange for a
reply to be sent to you.

Transfer Desk

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Dear Sir or Madam,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Home Office's handling of my FOI request 'Data Matching by the Audit Commission resulting in people being flagged as 'high risk fraud cases' on the basis of broad statistical reasoning'.

A full history of my FOI request and all correspondence is available on the Internet at this address:
http://www.whatdotheyknow.com/request/da...

It cannot be the case that this is not a Home Office matter since at the following internet site

http://www.homeoffice.gov.uk/about-us/pu...

theHome Office states that 'matches should not occur'.

Please, therefore, provide me with all internal briefings and papers received by the Home Office in connection with this matter which resulted in the Home Office publishing on its web site a comment on a matter which it now claims is not within its province

Yours faithfully,

K Hodgkinson

K Hodgkinson left an annotation ()

I notice that this information has been sent to all sorts of people by the Home Office including local magistrates. Therefore, not only does it appear that the Home Office regards it as within its province but it is also advising a whole range of other bodies about the matter.

Dear Sir or Madam,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Home Office's handling of my FOI request 'Data Matching by the Audit Commission resulting in people being flagged as 'high risk fraud cases' on the basis of broad statistical reasoning'.

A full history of my FOI request and all correspondence is available on the Internet at this address:
http://www.whatdotheyknow.com/request/da...

I am dissatisfied with the response as it says that the matter is not a Home Office matter. In that case, why did the Home Office comment on the matter in a circular it distributed and published on the Internet?
The response makes no sense and is at odd with the way the Home Office behaves.

Moreover, at this address an explanatory memorandum

http://docs.google.com/gview?a=v&q=c...

written by the Home Office and laid before Parliament appears. This too discusses data matching. Therefore, it is extremely odd for the Home Office to say that data matching is nothing to do with it.

It

Yours faithfully,

K Hodgkinson

Dear Sir or Madam,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Home Office's handling of my FOI request 'Data Matching by the Audit Commission resulting in people being flagged as 'high risk fraud cases' on the basis of broad statistical reasoning'.

A full history of my FOI request and all correspondence is available on the Internet at this address:

http://www.whatdotheyknow.com/request/da...

I am dissatisfied with the response as it says that the matter is not a Home Office matter. In that case, why did the Home Office comment on the matter in a circular it distributed and published on the Internet?

The response makes no sense and is at odd with the way the Home Office behaves.

Moreover, at this address an explanatory memorandum apparently submitted to Parliament by the Home Office appears. This discussed precisely the area I have asked about and indicates most strongly that the Audit Commission did correspond with the Home Office on the subject. Therefore, I ask for a review of the decision.

http://docs.google.com/gview?a=v&q=c...

Therefore, it is extremely odd for the Home Office to say that data matching of the sort I am asking about is nothing to do with it when it sent explanatory memoranda on the very same subject!

Thank you in advance for checking this out!

It

Yours faithfully,

K Hodgkinson

Dear Sir or Madam,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Home Office's handling of my FOI request 'Data Matching by the Audit Commission resulting in people being flagged as 'high risk fraud cases' on the basis of broad statistical reasoning'.

A full history of my FOI request and all correspondence is available on the Internet at this address:

http://www.whatdotheyknow.com/request/da...

I am dissatisfied with the response as it says that the matter is not a Home Office matter. In that case, why did the Home Office comment on the matter in a circular it distributed and published on the Internet?

The response makes no sense and is at odd with the way the Home Office behaves.

Moreover, at this address an explanatory memorandum apparently submitted to Parliament by the Home Office appears. This discussed precisely the area I have asked about and indicates most strongly that the Audit Commission did correspond with the Home Office on the subject. Therefore, I ask for a review of the decision.

http://docs.google.com/gview?a=v&q=c...

Therefore, it is extremely odd for the Home Office to say that data matching of the sort I am asking about is nothing to do with it when it sent explanatory memoranda on the very same subject! Is this a case of the left hand and the right hand not communicating adequately?

Thank you in advance for checking this out!

Yours faithfully,

K Hodgkinson

Home Office

K Hodgkinson,

Reference : T18457/9

Date: 26-Oct-2009

TREAT OFFICIAL CORRESPONDENCE

Thank you for your e-mail of 21/10/2009 10:28:01 AM regarding.....

The matters you have raised are the responsibility of Communities & Local
Government.

We have therefore transferred your e-mail to
[email address], who will arrange for a
reply to be sent to you.

Transfer Desk

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Dear Sir or Madam,

I am very sorry that this got posted numerous times. It was an accident.

Yours faithfully,

K Hodgkinson

K Hodgkinson left an annotation ()

Also the Home Office looks into law. Breaching Data Protection law is unlawful.

K Hodgkinson left an annotation ()

I believe that the department to whom the Home Office referred this also denies any responsibility!

Can anyone suggest anybody else to whom 'the buck' might usefully be passed on this?

K Hodgkinson left an annotation ()

The Home Office sent an explanatory memorandum on data matching to Parliament. For it now to say that is is not within its remit appears to be self contradictory.

The memorandum deals with Audit Commission data matching. This is what I am asking about. The Audit COmmission uses the data given to it under the law about which the Home Office put a memorandum to Parliament to highlight/label individual taxpayers as high risk fraud cases on the basis of statistical reasoning.

I hope this helps you to clarify this.

Dear Sir or Madam,

In support of my assertion that this is a Home Office Matter, may I refer you to the information in this document relating to the use of the electoral register for data matching?

http://www.justice.gov.uk/guidance/docs/...

The data matching in question would appear to be the NFI matching in which the electoral register is matched against 'all' of what the NFI unhelpfully refer to as SPDs. These are discounts of 25% under the Local Government Finance Act.

Please provide documents in connection with forthcoming consultation on electoral registration law and proposed changes to the list of organisations to whom electoral registration officers may/must supply copies of the full electoral register, as this move appears to be relevant. At present of course the NFI is not on this lists, so the NFI have to make councils get if from electoral registration officers and give it to them. It appears possible that the NFI would like both itself and 'audit teams' within councils to have direct access as of a right.

I am mainly concerned with England. However it would appear that Scotland is also involved.

Yours faithfully,

K Hodgkinson

Dear Sir or Madam,

http://www.google.co.uk/search?hl=en&amp...

Yours faithfully,

K Hodgkinson

Dear Sir or Madam,

I am afraid that you response is overdue.

In support of my assertion that this is a Home Office Matter, may I
refer you to the information in this document relating to the use
of the electoral register for data matching?

http://www.justice.gov.uk/guidance/docs/...

The data matching in question would appear to be the NFI matching
in which the electoral register is matched against 'all' of what
the NFI unhelpfully refer to as SPDs. These are discounts of 25%
under the Local Government Finance Act.

Please provide documents in connection with forthcoming
consultation on electoral registration law and proposed changes to
the list of organisations to whom electoral registration officers
may/must supply copies of the full electoral register, as this move
appears to be relevant. At present of course the NFI is not on this
lists, so the NFI have to make councils get if from electoral
registration officers and give it to them. It appears possible that
the NFI would like both itself and 'audit teams' within councils to
have direct access as of a right.

I am mainly concerned with England. However it would appear that
Scotland is also involved.

Yours faithfully,

K Hodgkinson

Yours faithfully,

K Hodgkinson

Lister Ian, Home Office

1 Attachment

Dear Mr. / Ms. Hodgkinson,

Thank you for your email of the 4^th December 2009 regarding your ongoing
FoIA request concerning the Audit Commission and data matching.

I am sorry to hear that you have not received any correspondence regarding
your request. I have made some enquiries into this matter for you and I
have managed to ascertain that a letter was drafted and emailed to you on
the 26^th November 2009. It would appear, however, that this email did not
make it to your whatdotheyknow.com page. I have reattached this letter to
this email.

As you will note from this letter, your request was erroneously
transferred to the Department for Communities and Local Government upon
it’s arrival in the Home Office. This was before it was identified as a
request for information under the Freedom of Information Act. This error
was identified on the 23^rd October 2009 and the request was allocated to
the Organised and Financial Crime Unit (OFCU) in the Home Office.

Again, as identified in the attached letter, OFCU were not able to provide
you with a full response to your request within the twenty working-day
period specified under s10(1) of the Act. Further more, we did not provide
you with a letter within the original twenty working day period. We are
therefore in breach of s10(1) of the Act.

I would like to apologise for the time taken to provide you with a
substantive response to your request. I hope that this delay has not
inconvenienced you unduly. I have spoken with the unit handling your
request and they still hope to be able to provide you with a response to
your request by the revised deadline in the attached letter.

If you do not receive any further correspondence regarding this request by
the 18^th December, please feel free to contact me and I will investigate
the matter further.

Sincere regards,

Ian

Ian Lister
Information Access Consultant
Information Access Team

    Email: [1][email address]
    Post:  Ground Floor, Seacole Building, Home Office, Marsham Street,
London, SW1P 4DF

 

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Dear Lister Ian,

Thank you very much. I am glad that the Home Office now realises that it has something to do with Audit Commission data matching. Better late than never!

The circular at the email I quoted above seems to have moved. However here is some more Home Office commentary which again contains a view on matches at odds with what appears to be the current view of the NFI which is that it can make up hit lists even when there is no suggestion in each case that something that 'should not occur' may have occurred.

http://www.homeoffice.gov.uk/about-us/pu...

Data matching is defined as the comparison of sets of data. For example, taking two local authority payroll databases and matching them. Matches should not occur, but if they do, fraudulent activity may be highlighted.

Factual Note

It is perfectly legal to receive a 25% discount when more than one person is on the electoral register and when people on the electoral register are not on council tax data sets. Given that these two lists of people serve different purposes, it would be very odd if the same people did feature on each list.

Yours sincerely,

K Hodgkinson

K Hodgkinson left an annotation ()

http://www.homeoffice.gov.uk/about-us/pu...

Home Office Circular 013/2008

Matches should not occur, but if they do, fraudulent activity may be highlighted.

The NFI seems to have repudiated this position and to think it can list as 'matches' cases even where there is no inconsistency, and situations which are perfectly acceptable.

Dear Home Office,

Dear Mr Lister

You have still not sent any information on the Home Office's policies on this issue as requested above.

The most recent Audit Commission annual report uses the term 'high risk' cases and says that these should be 'reviewed' annually, a euphemistic term since these reviews are to be conducted using usual procedures for the investigation of fraud, and are based on data matching exercises in which any evidence that might indicate fraud are the trigger for action.

In effect this reverses the burden of proof and acts against the usual presumption of innocence, as well as involving intrusion into the private life of innocent people in search of information which is used in unfair ways.

However, your own on line material misleadingly states that data matches should not occur, when the 'matches' in this case most certainly should and will occur. False positives outnumber wrongdoers by very large numbers.

I look forward, therefore, to finding out about your policies on the use of personal data in situations such as this.

Yours faithfully,

K Hodgkinson

Dear Lister Ian,

It now appears that the Home Office has sent letters about this exercise, in which it is misleadingly stated that the match shows anomalies. One such letter is on this web site and is dated July 2008.

This makes its earlier statements that it was not a Home Office matter surprising and inconsistent.

May I therefore request again copies of any background papers relating to this false belief of the Home Office that the NFI uses this matching exercise to show 'anomalies' that could be indicative of single person discount fraud. Or any other background papers on this match, including of course any that make the actual interpretation of the data matching fully and fairly clear in ways that accurately reflect council tax law?

I have been waiting a long time.

Yours sincerely,

K Hodgkinson

Dear Lister Ian,

I am sorry but the date you promised to reply by is overdue.

Through a F o I request to the Electoral Commission I have discovered that so far from regarding this matter as one for another Dept you have corresponded upon it, and some info from that discussion is on line on this site. It would appear from information available on this site that Richard Rhodes is the person to whom you need to speak. I hope you find this information helpful and that it well help you to avoid further delay in responding to this request for information.

Unfortunately it appears that the Home Office falsely believes that by matching council tax data sets to electoral register information the Audit Commission can identify anomalies which may indicate fraud.

This is not true.

Putting together all the pieces, it appears that what the Audit Commission does is compile 'hit lists' which it expects councils to work through in search of anomalies.

Its position appears to be that councils who work their way through every household on this list, sending out 'standard' investigation letters, which require people to eliminate themselves from suspicion and prove themselves innocent, will eventually come across some cases of non entitlement ie cases where people on the register but not on council tax data bases a)count as residents for council tax purposes and b)do not fall to be disregarded so that there is lack of entitlement.

It appears that these letters 'encourage' people to comply by the simple step of threatening them with higher bills if they do not cooperate.

Experience suggests that individuals who object are regarded as 'unreasonable' - a sobering thought when it turns out that high ranking legal opinion and at least some government bodies and human rights experts also find this activity questionable.

It also turns out to be very hard to obtain full and accurate information about the numbers of people who complain about these letters, or the numbers of people falsely suspected of fraud ie abortive cases.

So I do look forward to hearing from you on your department's contribution to this.

Wishing you the best for the New Year. May you never end up on an NFI hit list: don't make the mistake of thinking it can never happen to you! It can happen to the best of us.

Yours sincerely,

K Hodgkinson

Dear Lister Ian,

To help you in this matter, here is a summary of council tax law. It would appear that some NFI circulars have stated that this match identifies 'fraudulently claimed single person discounts'. Of course, it does no such thing. It identifies neither individuals who have told lies nor lack of entitlement. It identifies sets of individuals which, it is believed on statistical grounds, will include some who are fraudulently claiming a discount. Councils are expected to work their way through the 'hits' on the list, eliminating 'innocent' people in order to get shorter lists of more probably guilty ones. In effect, people are required to prove that they are 'innocent' in the course of Audit Commission targeted investigations in search of fraud and error.

Section 11(1) Discounts. Myths and Facts for Entitled Taxpayers (Draft)

What is a Section 11(1) Discount?

The Council Tax law mentions no such thing as a single person discount. This is a nickname. It can give people the wrong idea and so people should stop using it. There could be fifty people in a house where a 25% discount was legal. The number of people recorded in council tax data bases does not affect this.
The full Council Tax is not based on any set number of people living in a property. This is another myth. It is a charge per dwelling based on a combination of criteria including the band of your property and local levels of charge.

Section 11(1) is the part of the law that tells the Council when it must deduct 25% from the Council Tax bill for a household. Section 11 also includes other, larger discounts.

When must the Council deduct 25%?

Section 11 states that a Council must deduct 25% in two situations:
1 If only one person lives in a house and that person counts
2 If more than one person lives in a house, but only one of them counts.

What do you mean ‘only one of them counts’?

Some people do not count. These include full time students and pupils still at school.
If only one person lives in a dwelling and that one person does not count, the discount under Section 11 is more than 25%.
You should now see why talk of a single person discount may confuse people. Some people believe that if there is more than one adult living at an address some time during the tax year a single occupant discount has been fraudulently claimed or incorrectly awarded.

Other confusing words used to talk about section 11(1) discounts are ‘residency basis’.

It is much better to refer to a section 11(1) discount. The idea behind this discount is easy to explain and to understand. Clear explanations avoid confusion.

Does the Council have to explain things clearly?

Yes. Council officers collecting Council Tax are
supposed to prove that they can explain things clearly as part of their training. If you get a letter that is confusing, you have a right to complain to the people who work at the Council and to your local Councillors. You should ask for clear detailed information if this is not provided. Few people realise that they have the right to do this. Some Councils have policies about the use of clear English, but your council may not be one of these.

What does the Council Tax law tell the Council to do?

Every year the Council must take reasonable steps to find out whether every householder in the area is entitled to any discount. It must do this before it sends out the bill for that year.
The Council must ‘review’ the situation every year for everyone in the area. Obviously, at the start of the year, nobody knows for sure who will be living in their house during the year.
Therefore, the law says that when the bill is issued the Council MUST assume that the same amount and rate of discount will apply for the whole of the year. It does not matter whether people move in or out, so long as the same rate applies.

Every year, the Council must explain why it has awarded a discount. It must do this when it sends you the bill. It does not have to say how many people it thinks live in your house. Some councils do put things about ‘residency’ on your bill. If these guesses are wrong you do not need to tell the council about its mistake unless you realise that you will not be paying enough Council Tax. Usually, council tax bills are printed automatically and linked with data bases. These data bases do not have to include up to date information on who lives in each house. On the contrary, councils cannot afford to collect and process this information so it is reasonable for them not to bother.

Every year, the Council must explain to the basics of entitlement to everyone who is entitled to any of the Section 11 discounts. If it has taken off 25%, or 50%, under Section 11(1) or Section 11 (2), it should explain why. Obviously, it should also explain who counts and who does not. It should explain how to appeal if you think the bill is wrong. It must do this when it sends the bill. Unfortunately, many councils do not comply with these regulations. Some provide false information, and others omit important information.

What about cancelled, backdated or amended bills?

Councils often threaten to ‘cancel’ discounts. The word ‘cancel’ does not appear in the law. The law explains when councils must and may send out adjusted demand notices.
Once the annual bill, with a Section 11 discount (including the 25% discount) has been sent, the Council can only send a new bill for the full amount if it proves that you were not entitled to that rate of discount. Details in terms of residency are not relevant here. A vague suspicion that you might not be entitled based upon data mismatching is not enough. There is evidence, however, that some Councils do issue backdated bills in circumstances when the legal conditions permitting this have not arisen. It would be very expensive to take legal action in such situations, but it is theoretically impossible.

The Council has no duty to send you a new bill if the ‘basis’ for your entitlement changes from Section 11(1)a to Section 11(1)b. Doing this is arguably a waste of time and money. Nor can it ‘cancel’ your discount on this basis and then re-instate it in the same notice. This appears to happen sometimes.
If the Council does issue a backdated adjusted demand notice for money that you do not owe, you ought to pay it until you have appealed to a tribunal to get it back. If you don’t, you can be taken to the magistrate’s court.

What does the law say I must do?

First, let us be clear about what you do not have to do. You do not have to tell the Council Tax people every time somebody moves into your house or out of it. You do not have to tell them every time someone in your house turns 18. Some councils tell you they can fine you for not doing this, but they are not telling you the truth. They cannot.

You must tell the Council if you realise that you are not paying enough Council Tax. The Council Tax law says that if you do not do this, the Council can issue a fine. If you dishonestly do nothing when you know you are not paying enough tax then you are probably committing the crime of fraud.

If they have deducted a 25% discount, am I automatically 'claiming' to live alone?

No. The Council cannot fairly state that you are ‘claiming’ anything about ‘residency’. No criminal court would accept the content of a data base or a demand notice as evidence of something you had ‘claimed’. Only written and verbal statements you make count as ‘claims’.
Council tax law does not include the word ‘claim’. Once the bill for any year has been issued, the council might reasonable state that you were in effect claiming to be entitled to any discount it had taken off your bill. If, however, the Council discovers that somebody who counts has been living with you, it might suspect that you had concealed this fact in an attempt to get a discount you were not entitled to.
You should be aware, however, that some Councils have regarded themselves as entitled to act as if people who have not told the Council that somebody has moved in are ‘claiming’ to live alone. In effect, the Councils ‘invented’ some claims, and then investigated their ‘validity’. You should be aware that the Audit Commission’s publications are usually misleading, and make free use of the word ‘claim’ when this is neither accurate nor fair.
Of course, if you have claimed in the past to be living alone when filling in a form requesting the council to deduct 25% from your bill when in fact somebody else had their sole or main residence in your house at that time, then it might be reasonable to suspect that you might have lied in order to get a discount.

How can the Council use checks of household residency to validate single person discount claims for this tax year? It has just told me that this is what it is going to do, and it is September now.

This is a very good question. What the Council has said is unclear at best, if not misleading.
If the Council did not take reasonable steps to find out whether you were entitled to a discount before the start of the tax year it was breaking the law.
Further, and obviously, the Council cannot find out whether people in the house count or not by counting heads. Data matching organisations simply do not have the information needed to decide who counts and who does not. It is doubtful whether such uses of personal information are lawful, since they breach the right to privacy. The NFI has been advised that the privacy question is finely balanced.
The use of the word ‘claim’ is also seriously misleading, as we have seen.

Do not let the Council intimidate and bully you by sending misleading or inaccurate information.
Write and request a full and clear explanation of the Council Tax laws. The Council should provide you with this.

Can you be suspected of fraud when you have done nothing wrong?

If you claim a single person discount, then the answer to this question is yes. It happens to large numbers of people all the time, especially through the Audit Commission’s data matching exercises.

According to a number of councils, the Audit Commission labels everybody getting a discount where more than one person is on the electoral register but only one person is in council tax data sets as a ‘high risk fraud case’. The Audit Commission compiles what it calls ‘hit’ lists which it sends to councils. These are drawn up automatically using computers and regularly include very large numbers of innocent taxpayers. Put simply, this ruse apparently entitles local council staff to rifle through your personal electronic information and that of other people they think might be linked to your address in search of anything else that they think might possibly be suspicious, on the grounds that you are a fraud suspect.

You can be suspected of fraud even if you have not told any lies, and if there is no evidence that any other person at your address does not fall to be disregarded or that the other adults linked with your address have their main residence at your address.

The grounds for suspicion are apparently ‘statistical’. In other words, they think it is likely that people like you are thieves. You could say that it is a form of gambling. They might win something, but then again they might not.
Given the vast amount of ‘data’ provided to the National Fraud Initiative, it would appear that there will be more false positives than ever after the Council sends the contents of its data banks to the Audit Commission. Evidence from councils who have been involved in this data mismatching fiasco suggest that in fact the vast majority of people seen as ‘high risk’ frauds are in fact fully entitled to the very same discount that they were receiving.

Surely if I have done nothing wrong I have nothing to be afraid of?

Don’t be silly. Even if you have done nothing wrong, you are suspected of a serious criminal offence of dishonesty. Your data file is marked accordingly, and this ‘intelligence’ may be shared with a range of public and private bodies, including credit reference companies and private detective firms.
Those who have been the subject of these in the past have often found the experience upsetting and distressing. Nationally complaints about exercises like this add up to considerable numbers.
The Council has sent me a strange letter midway through the year, and seems to think I might not be entitled to my discount. If I don’t reply, they say they will cancel my discount. What can I do?
It appears to likely that your name is on an Audit Commission hit list or that your council is paying a credit reference agency to help it compile lists of potentially fraudulent people.

You might find the enclosed letter useful. Alter it to suit your own circumstances.

I have had a discount ‘review’ letter but my neighbour who is also entitled to a discount has not. This seems odd.

The Audit Commission regards it as good practice to limit reviews to ‘high risk fraud’ cases. It would appear probable that you will be viewed as a ‘high risk’ case. You may find it difficult to get anybody to admit this, as Data Protection Law appears to make it legal to conceal from people that they have been so classified. However, the Audit Commission does refer to dwellings where more than one person appears to be living but only one person is on council tax data bases as ‘high risk’ cases. You may have been given some sort of warning about this in the past, but you may not have understood it as it was not clear or you may have assumed that as an honest entitled person you did not need to worry about being suspected of fraud. They appear to use the word ‘review’ because they try not to let people realise they are suspected of fraud as this may affect the outcome of the investigation. The term ‘review’ appears to be designed to conceal the true aims of the exercise, which is to detect and prevent fraud, or more probably, since you are currently receiving a discount, to detect it.

****************************

Dear Sir or Madam
Re your letter dated xxx, reference xxx.
I have re-read the relevant sections of my council tax demand notice (alter as appropriate to show source of information e.g. Dept for Communities web site etc.). I confirm that I am entitled to the discount I am receiving, namely a rate of 25% under Section 11 of the Local Government Finance Act deducted on the statutory assumption that the same rate and amount will apply for the whole year. You have deducted the appropriate amount from my council tax bill.

I inform you that I experienced your letter, written, it would appear from ‘fair processing information’ available on line, as part of an investigation into fraud and error as a result of a ‘data mismatching’ exercise carried out by the National Fraud Investigation, as harassment. There is no ‘inconsistency’ in my case and, whatever the Code of Data Matching Practice may say, the Audit Commission has most certainly not discovered a ‘potential fraud’ or ‘lack of entitlement’ in respect of my council tax discount. * You inform me that this discount is ‘residence-based’. If you have calculated the bill ‘on the basis’ of residence instead of on the basis of the statutory assumptions laid down for you to follow, this would appear to be a serious administrative error. (*delete if inappropriate)

Your threat to issue a backdated adjusted demand notice for money I do not owe should I fail to reply to your letter is particularly harassing. It is also inappropriate as the conditions in which the regulations permit you to issue such a bill have not arisen. Moreover, the Code of Practice forbids any assumptions about guilt to be made.

You appear to be acting on the belief that this match throws up information inconsistent with eligibility to the discount. This is a mistaken belief. You ask me to explain personal information about third parties. I have nothing at all to explain.

Should you issue a bill for tax I do not owe, I shall appeal through the appropriate channels. I notify you in advance that I shall appeal on the grounds that I am entitled to a discount under Section 11 of the Local Government Finance Act.

I shall regard any further approaches in this matter to me or to those connected with me as harassment. Please desist from such approaches.

Yours sincerely
J. Smith.

Yours sincerely,

K Hodgkinson

Dear Lister Ian,

It seems to be taking your department rather a long time to dig out its background information on council tax law and fraud and the role of the NFI in labelling people as 'potential frauds' - in the absence even of anything appearing to be prima facie evidence of lack of entitlement.

It would appear that in Feb 2009 the Audit Commission decided that it has better find out about council tax discount law. It appears not to have got round to the law governing adjusted demand notices (cancelling discounts) yet. Therfore, whatever the NFI did or did not believe about this data comparison, it seems finally to have got up to speed with some if not all council tax law. We should be grateful for small mercies, I suppose.

Here is a link, as it looks possible that your serious crime dept may not have looked quite seriously enough into this matter.

But this legal summary by the Audit Commission does show that the letter sent out by the serious crime dept within your department, which made various claims about the output from this comparison was unfair, did not accurately reflect council tax law, and was, perhaps,not quite as well judged as it might have been.

Here is a link to the (belated) information obtained by the Audit Commission. You may find it helpful.

http://www.whatdotheyknow.com/request/ri...

Never mind, I am sure you will do whatever you can to get things put right and ensure that only the fullest most accurate and fair information goes public in future.

Perhaps you could now write to all those magistrates and say, sorry, sorry, Audit Commission data matches are not lists of situations which should not occur, they label a far wider range of people as 'potential frauds' than was previously thought. Sorry sorry, cancel previous instruction.

Or, you might possibly do something about the NFI issuing 'hit' lists where the so=called matches do NOT in fact produce lists of cases in which situations which should not occur have been found. Preferably the latter?

Nobody likes being suspected of fraud when they have done absolutely nothing at all wrong and are fully entitled to the discount that was lawfully and properly deducted from their tax bill. For this to happen simply because, in a democracy, they filled in an electoral registration form, has an irony of its own.

Yours sincerely,

K Hodgkinson

Dear Lister Ian,

Some months ago, I made a F o I request about council tax matching. A history of this is on the Whatdotheyknow.com web site. You promised to review your initial decision but I have heard nothing. I think you may be in breach of the rules as explained on this site. Your review is way overdue.

I made this request because of a Home Office circular that stated that NFI data matches should not occur, phrasing apparently taken from the explanatory notes published on the government web site along with the new law. Subsequently I discovered via another F o I request on this site that a Home Office officer had written a letter on this subject which was apparently among background letters circulated in advance of an important meeting involving civil servants and officers from other government bodies including the electoral commission.

In this letter it falsely states

the Audit Commission has recently engaged in a data matching exercise which has involved the matching of electoral register data to council tax data. The purpose of this match has been to identify anomalies that could be indicative of single person discount fraud. This is where a person claims single person discount but there have actually been other non-dependent adults living at the same premises as evident from the electoral register.

This match does not identify anomalies. As there is in law no such thing as a single person discount no person can claim any such thing.

The Audit Commission has received complaints from data subjects about falsely representing the significance of this comparison, which it accepted were right. It accepted that the face that more than one person is on the electoral register drawn up some months after council tax bills are sent out does not mean there was an initial fraudulent claim, does not mean that there has been a failure to carry out a legal obligation under council tax regulations or otherwise, and does not even mean that there is lack of entitlement.

In respect of the 'rising 18s' so called 'match', it accepts that the mere fact that a child has an eighteenth birthday is not one that must be law be reported to council tax departments, even though it has to be stated on electoral register forms.

What your account and those of the NFI (typically) omit to mention is that entitlement arises on every day when all but one people in the premises fall to be disregarded. Disregarded adults who are on the electoral register account for a very large proportion of the abortive investigations carried out on the behest of the audit commission into fully entitled and honest citizens. As a result, much distress and anxiety is suffered by people flagged electronically as 'potential frauds.'

Given that the letter in question was written by your department and would appear to have been significant in affecting decisions taken by other departments, your initial decision that it was not a matter for your department appears, with respect, to be little short of absurd.

I realise that my original may not have been phrased properly, but you have a duty to try to agree it or modify it and I have I think asked for all background papers eg meeting minutes etc on this.

The letter cannot have come out of thin air: something must have persuaded its author that what he was saying was fair and accurate. What?

I believe that you are now well and truly in breach of your obligations as I understand them from the advice on this web site.

Please do something to remedy the matter asap

Yours sincerely,

K Hodgkinson

Lister Ian, Home Office

Dear Ms. Hodgkinson,

Thank you for you email and you voicemail about your FoIA request
concerning the National Fraud Initiative and data matching.

I am sorry to hear that you have not received our response to your
request. Our records indicate that a substantive response to your
request was sent to you at whatdotheyknow.com but it would appear that
this response has not made it through. I am aware that some
correspondence sent through our correspondence tracking system does not
make it through to the WDTK website. This is an ongoing issue which we
are trying to resolve.

I have spoken to the case officer who handled your request and they are
sending me a copy of their response to this request which I will
hopefully be able resend later this afternoon.

Regards,

Ian Lister
Information Access Consultant
Information Access Team

show quoted sections

Lister Ian, Home Office

4 Attachments

Dear Ms. Hodgkinson,

Further to my email yesterday afternoon, please find attached our response
to your FoIA request that was originally sent in the last week of January
and resent (below) on the 3^rd February 2010. It would appear that the
email address was not entered correctly on these previous emails. I
apologise if this delay has inconvenienced you unduly.

Sincere regards,

Ian

Ian Lister
Information Access Consultant
Information Access Team
 

 

show quoted sections

K Hodgkinson left an annotation ()

The Home Office appears to have sent contradictory information here. There is good news and bad news.

It says it is not involved in running the national fraud initiative, so it cannot answer most of my questions, but it accepts that it was involved in putting it 'on a statutory basis.' So far, so good. I don't particularly object to cases where there appears to be prima facie evidence of lack of entitlement being investigated. This seems sensible and prudent, though I agree wholeheartedly with the opinions put forward by the Electoral Commission, which seem to me to concur with the attitude taken by the court in the second Robertson judgement in that it was said that that judgment represented a reasonable balance of potentially conflicting interests and showed clear awareness of the duty of the country under conventions which it has signed not to interfere with the right to vote.

On the other hand, we are apparently being asked to believe that prior to promoting the legal changes the Home Office had not been aware of the details claims and counter claims about what could be done and what was being done in respect of the electoral register council tax match and knew nothing of the details of the matter. This is difficult.

In respect of the circular - which is still on its web site - stating that 'matches should not occur' it says that this characterises how the initiative works, but that it is not intended to be a detailed explanation.

One gets used to these people using English vocabulary in ways peculiar to themselves which appear to flout the usual semantic conventions.

Either this circular describes how the initiative works or it does not. As it happens it does not.

In contrast to the accounts given to Parliament of Audit Commission data matching, this exercise does not limit itself to producing lists of situations which should not occur or which are anomalous. Pointing this out is not 'going into details', it is stating a simply and uncomplicated fact. This is NOT how the National Fraud Initiative works at all.

Therefore, it would appear to be up to the Home Office to do something about the situation which pertains viz one in which anybody with access to Google can discover that not just one but a number of NFI exercises do not work by identifying anomalies or inconsistencies.

The Home Office reveals that it decided not to go ahead with plans to make specific alterations to the law in connection with the use of the full electoral register because it received objections.

It consulted various bodies about its consultations, and sent out what appears to be a standard letter. One version of this is already in the public domain, released by the Electoral Commissioner.

Having read the letter sent out by the Home Office and the responses, I believe it is fair to say that they all miss the point. On this occasion, the Home Office cannot offer the justification that it was not going into detail as it did venture into detail, and it got it quite wrong. The Home Office seems to have been working on the assumption that the NFI works by identifying discrepancies and anomalies, situations where there appears to be prima facie evidence (barring of course data errors and co-incidences)of lack of entitlement or some other strong grounds for suspecting individuals of fraud.

The letter implies, completely incorrectly, that the exercise in question is data matching (the term used in the law and used in policy and research papers put to Parliament as the law was being discussed) in the sense used in its circular ie that it identifies situations which should not occur. This implication is not an accurate one. It gives a completely misleading impression of what is actually happening to people.

It characterises (note use of word in more usual sense) the particular comparison involved as follows:

... the NFI team at the Audit Commission has recently engaged in a data matching exercise which has involved the matching of electoral register data to council tax data. The purpose of this match has been to identify anomalies that could be indicative of council tax 'single person discount' fraud. This is where an individual claims single person discount, but there have actually been other non-dependent adults living at the same premises, as evident from the electoral register.

The first thing to note about this is the addition of the phrase 'non-dependent'. Perhaps subjectively this was felt to add rhetorical force to the argument that the people on what the NFI calls 'hit' lists merit being subjected to fraud investigations, but as a matter of fact it is wrong. A moment's reflection would have led to the realisation that the electoral register says nothing about whether or not an adult resident is 'dependent' upon the liable adult, whatever, indeed, that term might mean.

The next thing to note is that the term 'single person discount' is not used fairly or accurately. The writer is right to put it in inverted commas, as the term appears nowhere in council tax law, though its use is often justified in terms of false assertions that the 'full council tax' is based on two adults in the premises, another false assertion, since it is not based on any such thing.

A discount is a reduction in the amount payable. Entitlement to council tax discounts goes on a day to day basis. The reduction in point is one made at the 'appropriate rate' set by the Secretary of State, which is currently 25%. It is deducted at the start of the tax year in respect of the following year. It is deducted on the basis of assumptions about the coming year. These are, basically, that the same rate and amount will apply for the whole of that year. Entitlement arises on each day when there is one adult who counts for this purpose resident or when more than one adult is resident but all but one adult falls to be disregarded. By law the council must explain this to the taxpayer. Put simply, the council must also tell him or her that if the situation changes so that two adults who count are living in the premises and the discount of 25% no longer applies, they must let the council know. This is also common sense, as common sense tells us that receiving a discount you are not entitled to is stealing.

There is therefore no anomaly if the electoral register made up some months after the bill was issued, and nobody knows how long after any initial declaration was made to the council shows that more than one adult is resident. A taxpayer required or requested to 'explain' this anomaly would be justified in feeling extremely aggrieved. There is no anomaly to explain.

If the Audit Commission had bothered to obtain and release full information about its pilots everybody would have been clear about this.

Hilariously, the Home Office states that it was trying to clarify the legal basis of the exercise. One does not clarify the legal basis of an exercise by misrepresenting the nature of the exercise itself. Obfuscation would be a more appropriate term.

The example of Hillingdon is often cited. In that pilot, over three thousand 'hits' were reported, but of those 'hits' the vast majority turned out to be innocent entitled people were no anomaly was discovered, even after each individual case had been investigated. The only surprising thing about it is that so few people complained. In my view, this is often because councils provide flawed and unreliable accounts of what they are doing and why. The use of threats to issue backdated council tax bills for money people do not owe in order to ensure compliance is common. This threat, to carry out an act which strictly speaking would appear to be unlawful, is arguable oppressive. But it appears to focus people's minds. Few of us want the hassle of a civil tribunal, especially when it would be clear that we were at it because the council suspected us of fraud.

In respect of the legal opinion widely circulated by the Audit Commission in respect of this comparison, I note that counsel stated that the auditor was not obliged to be of a suspicious frame of mind. this comment is interesting because the phrase 'a suspicious frame of mind' would appear to be characterise the mind set of the Audit Commission fairly accurately.

It believes that some people lie to get council tax discounts, and I am sure that some people do. It appears to believe that it is entitled to insist that councils carry out fishing trips in search of these individuals, eliminating from suspicion only those dwellings where just one elector is registered, and focussing on all the rest.

In one response it apparently asserted that the Code of Data Matching says that councils should eliminate 'innocent' cases in order to focus on 'more probably fraudulent ones'. In fact, of course, it is the victims of what is arguable a suspicious frame of mind who are required to eliminate themselves. The Code, of course, says no such thing.

Therefore, though it appears to be good news that the Home Office did not carry through its plans, it is bad news that so many of those involved appear to be working on the basis of an account of the data and of the significance of the output of the processing which unfairly and significantly misrepresents both.

I think it is fair to argue that it is not appropriate that letters sent by the Home Office should add to the evident confusion that exists on this matter, and that all involved in any consultations should be crystal clear about what is actually being done with the electoral register.

This is especially the case then such letters may be interpreted as setting out Home Office policy on the uses of the electoral register when it would appear from what you say that you had in fact never given the matter any serious consideration.

It is arguably ridiculous to complain that so few young people register to vote when the first experience of so many of them when they register is that their parents and carers end up labelled a 'high risk fraud' cases by numerous local councils and being investigation in the hope that they do not fall to be disregarded or that they are non-dependent adults on the say so of government bodies and agencies who really ought to know better.

It seems reasonable to request that the Home Office should take steps to clarify the communications it has sent round, making the actual logic underpinning the processing clear. Perhaps a full review of NFI exercises is overdue? A few moments with Google can teach you a lot.