Council workers working second jobs are being investigated by the government’s fraud squad after staff were caught “moonlighting” while working from home.
The National Fraud Initiative (NFI) is examining the practice of “multi-contracting” in which an employee deceptively holds two or more jobs simultaneously.
The NFI, which is overseen by the Cabinet Office, is assessing the extent of the problem after many local authorities warned the practice was worsened by hybrid working, where staff only come into the office on certain days.
At least three councils (Wakefield, Enfield, Kensington and Chelsea) claim to have caught their staff in the scam.
They warned that hybrid working during and after Covid lockdowns increases risk and newfound flexibilities make a second income “very attractive”.
In each case, anti-fraud officials identified the activity and presented it to annual council meetings.
This year, NFI launched a pilot program to determine the scope of the problem in London councils, building on cases identified in local authorities in the past.
Levels of working from home have remained stubbornly high in both the public and private sectors since the pandemic, and ministers are increasingly concerned about the impact this will have on the productivity of the Civil Service.
Senior civil servants told to report to duty
Freedom of information figures in September showed that thousands of staff at HM Revenue and Customs, struggling with a decline in customer service, were not coming into the office at all; but the tax office has repeatedly denied work-from-home policies affecting its performance.
Last week, senior civil servants were told to report to the office more than 60 per cent of the time to promote “strong visible leadership” and increase face-to-face communication with junior colleagues.
New hires will also be required to come to the office more than 60 percent of the time, according to the rules, while other staff have been told that they must work from the office at least three days a week.
Each council is responsible for setting its own working arrangements, but most require people to advertise second jobs.
Working for two employers at the same time becomes time theft and fraud when someone knowingly collects two full-time salaries and splits their hours so that they only work 50 percent of the time for each.
The Government pilot investigating “multi-contract work”, which is currently in the data collection phase, is in collaboration with the London Borough Fraud Investigators Group (LBFIG).
‘New and emerging type of fraud’
The group is chaired by Chris Keesing, the City of London’s director of anti-fraud and investigations, and includes anti-fraud officers from every London borough.
At Kensington and Chelsea council, “moonlighting” was described as a “new and emerging form of fraud” in an official report published in June 2023.
“The pandemic created this risk when it normalized working from home and hybrid working,” he said.
“While this increases flexibility, it also creates new types of risk, with a second income becoming very attractive during a cost-of-living crisis.”
He said there were “several examples” of council employees “simultaneously (full-time) working fraudulently for other organisations”.
Anti-fraud officers found one employee was also working full-time at a housing association.
In Enfield council, five people were found to be working in unregistered secondary employment in 2022-23.
Gemma Young, the council’s head of internal audit and risk management, suggested remote working was helping to introduce “new forms of fraud”.
Leadership training to raise awareness
“Since the pandemic, it has been normal practice for employees to work from home for part of the week,” it said in its 2022-23 Anti-Fraud Annual Report.
“While this has many potential benefits (particularly work-life balance without requiring a daily commute), remote working, and especially reduced employee surveillance, has helped give rise to new types of fraud.
“The most common of these in Enfield and other councils is informal secondary employment or ‘multi-working’.”
He said the anti-fraud unit was providing training to the council’s senior managers to raise awareness of “emerging” fraud and was also participating in a London-wide pilot to identify “concurrent placements” carried out by agency staff.
Three Wakefield council workers faced multiple allegations of contract work in December 2021, the Wakefield Express reports.
‘The pandemic enabled such frauds’
Corporate anti-fraud manager Rob Blair told the council’s audit committee they would “monitor trends going forward”.
He said: “We’ve done some analysis and I think the pandemic has enabled these types of scams or the potential for fraud, with staff working remotely and working from home etc.”
An NFI investigation using a payroll report also uncovered “allegations of fraud” by an employee at Birmingham city council in 2020-21.
The employee had joined the council but was also taking up a temporary role as a bank staff member at a local NHS trust.
The NFI found that both roles were undertaken while working at home, “allowing fraudulent claims to be made”.
It is understood that the pilot project is not a direct response to the increase in remote working and is not specifically focused on home workers.
The investigation is not limited to working practices, meaning all staff will be examined.
However, in the letter sent to civil servants, it was promised that flexible working would continue to be the “fundamental” of professional working life.
A Cabinet Office spokesman said: “The National Fraud Initiative matches and compares data provided by private and public sector organizations to identify cases of fraud.
“Last year, this work saved taxpayers £171 million.
Working with organizations to combat this fraud
“One of the cases of fraud identified by the National Fraud Initiative involved multiple contract work where a person misleadingly worked in two roles simultaneously, including for local councils.
“The Public Sector Fraud Authority, which oversees NFI, is working with organizations to combat this type of fraud wherever it occurs.”
A Birmingham city council spokesman said: “Like many employers and organisations, following the pandemic, [we] It has introduced its New Ways of Working policy, which implements working practices, technology and facilities to enable its staff to work agilely and fulfill their roles.
“Wherever our staff works, our policies have not changed.
“Under the staff code of conduct, employees are responsible for informing their managers about any paid work they do for other employers, in particular to ensure that we comply with the working time directive.
“If directors have knowledge or concerns about any conflicts of interest, we will investigate.”
A spokesperson for Kensington and Chelsea council said: “As for the working from home policy, this is not actually the most relevant policy for situations like this.
“The second thing is not to declare intent, whether working from home or not.
“Civil servants are expected to disclose secondary employment; If they fail to do so, they may be breaching the code of conduct and committing fraud offenses under the Fraud Act.
“The same applies if individuals falsify their timesheets or work schedules to fulfill two full-time roles.
“We are working with the Cabinet Office and this is their data matching exercise so they can provide further information on this.”
Wakefield and Enfield councils have also been contacted for comment.