Agenda item

The Leader presented the report advising that it was important for the Council to have an up to date and relevant Anti-fraud, bribery and corruption policy statement in order to deter such activity within the organisation and with our partner organisations, to deal with any allegations appropriately and to strengthen overall governance arrangements. This was the first revision of this statement for a number of years.

The Council’s Audit Committee agreed to note and endorse the Anti-fraud, Bribery and Corruption Policy Statement and recommended it to be formally approved by Cabinet.

Newport City Council was one of the largest organisations in the City.  It controlled millions of pounds of public money and took seriously the high expectations of the public and the degree of public scrutiny to which the Council’s affairs were subject.

Good corporate governance required that the Authority must demonstrate clearly that it was firmly committed to dealing with fraud and corruption and would deal equally with perpetrators from inside (Members and officers) and outside the Council.  In addition, there would be no distinction made in investigation and action between cases that generate financial benefits and those that did not.  The intention was to encourage a culture of deterring fraud and corruption whilst sending a very clear message that if such activity was identified it would be dealt with firmly, consistently and appropriately.

The policy statement embodied a series of measures designed to frustrate any attempted fraudulent or corrupt act and the steps to be taken if such action occurred, providing key contacts to report suspected fraud or corruption along with the responsibilities of key officers, Members and employees.  It incorporated The Fraud Act 2006 which defined fraud through three key offences, provided a definition of corruption and also outlined The Bribery Act 2010 where there were four key offences.

The maximum sentence was 10 years imprisonment when found guilty of Fraud and or Bribery, with the potential of an unlimited fine when found guilty of Bribery.

This policy statement embodied a series of measures designed to frustrate any attempted fraudulent or corrupt act and the steps to be taken if such action occurs.  For ease of understanding, it is separated into five areas as below:-

          Culture                                           

          Prevention                                     

          Deterrence                                                

          Detection and Investigation           

          Training

The Fraud Act 2006 defined fraud through three key offences:

·            Fraud by false representation (where a person dishonestly made a false representation and intended by making the representation, to make a gain for himself or another or to cause or expose the risk of loss to another);

·            Fraud by failing to disclose information (where a person dishonestly failed to disclose to another person information which he was under a legal duty to disclose; and intended by failing to do so, to make a gain for himself or another; or to cause or expose another to the risk of loss); and

·            Fraud by abuse of position (where a person occupied a position in which he was expected to safeguard or not to act against the financial interests of another; dishonestly abuses that position with the intention to make a gain for himself or another or to cause or expose the risk of loss to another).

It also created new offences:

·            Obtaining services dishonestly

·            Possessing, making and supplying articles for use in frauds

·            Fraudulent trading applicable to non- corporate traders.

The Act largely replaced the laws relating to obtaining property by deception, obtaining a pecuniary advantage and other offences that were created under the Theft Act 1978.

There was no universally accepted definition of corruption, although the World Bank defined it as ‘offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party’.           

Corruption was often associated with the act of bribery.  The Bribery Act 2010 identified the criminal offence of bribery and identified four key offences:

·         Bribing another person - (A person committing an offence by offering, promising or giving a financial or other advantage to another person, directly or through an intermediary: intending that advantage to induce a person to perform improperly a Function or to reward a person for so doing (whether or not it was the same person to whom the advantage was offered) or knowing or believing that accepting the advantage would itself be improper performance of a Function);

·         Being bribed - (A person committing this offence by requesting, agreeing to receive or accepting a financial or other advantage, directly or through a third party, for his or her own or someone else's benefit: that person intended that, as a consequence, there was improper performance of a Function (whether as a reward, in anticipation of or as a consequence of the request, agreement or acceptance). The request, agreement or acceptance itself may be the improper performance of a Function);

·         Bribery of a Foreign Public Figure (This offence would be committed if a person offered or gave a financial or other advantage to a foreign public official with the intention of influencing the foreign public official and obtaining or retaining business, where the foreign public official was neither permitted nor required by written law to be so influenced); and

·         Failing to prevent Bribery – (A company was “strictly liable” for any bribe paid by a person performing services on its behalf, unless the organisation proves that adequate anti-bribery procedures were in place.)

The Bribery Act 2010 replaced the fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-1916.

Decision:

That the Anti-fraud, bribery and corruption policy statement be approved.