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Fraud involved in boiler grant scheme

Created on 11/05/2019 @ 09:20
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Fraud took place in a government grant boiler scheme administered by Powys County Council (PCC) but “no evidence” was found that the authority was at fault.

Ian Halstead, assistant director of independent internal auditors, SWAP produced a report on how the ECO (Energy Company Obligation) 2 boiler scheme had been run by PCC following claims of fraud by Powys Plumbing Group (PPG).

The item had been scheduled to be held in private, but a last minute change of mind by PCC solicitor Clive Pinney, saw the item made public at the audit committee.

Mr Halstead explained: “It’s a government scheme to tackle fuel poverty and reduce the carbon footprint, it’s funded by the energy companies.
“ECO 2  ran from April 1, 2018 to September 30, 2018.

“As a result of that scheme we had 2,048 measures (boilers or insulation) delivered across Powys.

“As a result of a complaint, we were asked to look into this process and whether the council’s vetting process was effective.”

Mr Halstead went on to say the scheme ran under guidance from the (Westminster Government) Department of Business, Energy and Industrial Strategy (BEIS) and regulators Ofgem.

Mr Halstead said: “They set the rules and are not prescriptive in any way. “It does have a minimal number of criteria and that varies through Wales.

“Some have more criteria, others have the same amount as Powys. Essentially Powys are complying with BEIS and Ofgem.”

Mr Halstead said that in the six months ECO 2 ran across the whole of the UK, 15,500 measures were delivered.

During that time Powys delivered 2,048 measures, which is 13 per cent of the total.

“As you can see it’s much higher,” said Mr Halstead. The reason he said was that Powys has a large volume of “off gas” heating systems so it was targeted for that reason.

Mr Halstead continued: “The process of vetting is down to a self assessment process.”

Applicants would determine if they complied with the guidelines and ticked a  box to say that they suffered fuel poverty.

The property would have to qualify under an energy efficiency rating.
And Mr Halstead added it was the the applicant’s responsibility to fill the forms in “honestly and correctly.”

Mr Halstead said: “We met the Plumbing Group, but as part of that discussions, no evidence was provided showing fraudulent applications. I need to make it clear the council is not responsible for the actions of applicants.

“However, the council as a steward of these funds is responsible for having the processes to prevent fraud. The council charges an administration fee of £150 for checking the eligibility process.

“In terms of the financial or fuel poverty criteria there is no checking." Mr Halstead explained the holes in the scheme: “The process is not robust or accurate because it lacks information.

“It did not protect the council against claims of fraud and corruption. Record keeping was minimal and it did not help us with the audit.

“From our sample of 100 we found that 21 per cent did not meet the criteria – so in effect a number of applicants were given a grant they did not qualify for.

“The housing department tested an extended sample and found 12 per cent were not entitled to the grant, because the council processes failed.”
ECO 2  generated £231,000 for PCC.

Mr Halstead explained that payment happened after the work had been completed, and that PCC had lost an estimated £267,000.

This was because the council had carried out an extra 1,782 assessments but had not sent the bills out and he believed, in future, PCC should do that first not last.

He concluded his report saying: “Vetting procedures did not show due diligence and did not deter or prevent fraudulent claims.

“If fraud has occurred it is between the applicant and the agent.”

By Elgan Hearn, Local Democracy Reporter


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