The statutory code of data matching practice under which the Audit Commission operates its data processing for the National Fraud Initiative should be strengthened, not weakened, as the Commission appears to intend should happen in its forthcoming consultation.  Failing the enactment of stringent additional safeguards for the innocent, the whole initiative, which goes to the heart of privacy and data protection should be abolished.

It is perfectly legal and proper for a 25% discount to be deducted if an adult appears on the electoral register but not on the data bases of the councilo which made the deduction. Indeed, the Audit Commission's own solicitor has accepted that the costs of collecting up to date information on who lives in each house would be prohibitive for council tax departments.

Despite this, the NFI has two exercises in which people are targeted for fraud investigations simply because they put an adult on the electoral register who is not on council tax data bases.  This exercise routinely gives rise to thousands of false positives, who have to prove their innocence.  Some council audit teams simply label them as 'frauds' and report numbers of 'frauds' on the basis of hit lists without an investigation of any sort and even when the council tax department has pointed out to them that the majority of people on these hit lists will be fully entitled, have failed in no statutory duty to inform of changed circumstances, and have told no lies.

A great deal of misleading information on this exercise has been circulated by the Audit Commission, in annual reports and other places.  Yet its own legal team admitted, after complaints, that it is perfectly legal to have a discount when the council tax department does not know about an adult who was subsequently added to the electoral register.  The legal opinion was provided by Leah Griffiths and is in the public domain.

The Audit Commission took advice from a barrister who said that if there appeared to be prima facie evidence that a person was 'claiming' a discount to which they were not entitled an auditor would be entitled to investigate.  The problem is that this data comparison does not and cannot show that a person is not entitled to the discount.  It cannot show that the second adult 'counts' as a resident for council tax purposes ie that they do not as the law has it 'fall to be disregarded'.

Sadly the vast majority of second adults on the electoral register but not on council tax data bases DO fall to be disregarded. 

Why is this idea important?

First, this use of data is not one that has ever been clearly explained by the Audit Commission, which routinely asserts that it matches data to show up inconsistencies (barring errors in the data itself eg two people of the same name, wrong NI numbers etc).  Therefore, it is not a use that was put before and approved by Parliament when it gave the Audit Commission powers to carry out 'data matching'.

Secondly, some victims of similar exercises run by credit reference companies have been told by the Information Commissioner that they had a right to take legal action – though of course the costs of this are prohibitive.

Thirdly, the majority of abortive investigations appear to be in respect of parents who have in all good faith put their oldest child on the electoral register and that child was still in full time education and training and therefore did not affect entitlement to the discount and did not give rise to any obligation to inform the council tax department of material changes in circumstances.

Nobody should be put on a 'hit' list and subjected to a fraud investigation simply because they fill in a form which by law they must fill in and a government sponsored body is misusing the data to compile statistically based 'hit' lists of people who might turn out AFTER investigation to be incorrectly receiving a discount.

The whole thing makes a mockery of the word 'democracy'.



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