Local government is leaving itself open to fraud in a bid by the Government to prevent further breaches in data security.

The Department of Work and Pensions (DWP) has written to council revenues and benefits officers to call a halt to data exchanges, until the department has checked its security processes. The move follows the loss of HM Revenues and Customs data in the post last week.

But the LGA has raised concerns over the security measures. They will mean local authorities will not be able to compare their data with statistics from the DWP – a measure used in a bid to detect fraud.

An LGA spokesman told The MJ: ‘We are deeply concerned about the knock-on effect of the freeze on data sharing. We want to crackdown on fraud and hope normal service will resume as soon as possible.

The DWP has recognised there is a potential problem – and the restrictions could impact on council's fraud-detection targets. In a memo from the department, head of housing strategy, Paul Howarth, said the department would resume data-matching as soon as possible. In addition, he assured authorities the 2007/08 fraud targets would be reviewed accordingly.

Bob Trahern, president of the Institute of Revenues, Rating and Valuation (IRRV) and assistant director at North Warwickshire BC, said it was a ‘very unfortunate' situation. He said councils found data matching a ‘valuable tool' in the battle against fraud and mistakes.

‘It is important that a secure way of passing all data is identified quickly to enable the continued effective joint working between councils and potential government departments.' Julie Holden, head of revenues and benefits at Tandridge DC told The MJ the ban would have little impact in the short term, particularly for smaller councils such as her own. She said councils would have to revert to using their own checks, without the fall-back of government data.

‘It is inconvenient but it shouldn't, in the shorter term, cause too many problems.' But, she added: ‘ The longer it goes on, the more chance there is of errors.'
The DWP told councils: ‘We are introducing a brief, temporary suspension of any movement of data by disc, tape or memory stick through the courier or postal system.

‘This will allow us to check compliance with our processes and policies. This applies to any customer or staff data.'