99% of claimants for Council Tax Reduction are exceedingly honest.

A Shepway Vox Team investigation has discovered that 10,203 people have had their claims for Council Tax reduction processed by an algorithm and not informed by Folkestone & Hythe District Council their data was being processed in such a way.

At the end of March 2021, ten thousand two hundred and three (10,203) people had claimed Council Tax Reduction from Folkestone & Hythe District Council.

Council Tax Reduction is a reduction in your Council Tax bill based on:

• your income

• the size of your family

• other adults who live with you

• the amount of Council Tax you have to pay

You can apply to get money off your council tax bill if you’re on a low income or claiming benefits. You can apply for Council Tax Reduction whether you own your home, rent, are unemployed or working. However what applicants are not informed of, is their CTR claim will be analyzed by an algorithm produced by Xantura; which is used by Folkestone & Hythe District Council.

We know that there were 3,639 pensioners in receipt of CTR and 6,564 working age recipients claiming CTR on the 31st March 2021.

The Council’s Xantura algorithm found 84 CTR cases with fraud/error in 2020/21; which combined equates to 0.82% of all cases resulting in fraud/error out of 10,203 in total in 2020/21. That demonstrates the vast majority of applicants are exceedingly honest.

The Council do not separate out whether a claim was fraud or error, so it’s not possible to say with certainty any cases of fraud was discovered. As that’s the case, and given just 0.82% of cases were fraud or error, it demonstrates 99.18% of claims for CTR were made honestly and free of error.

Every claim is assessed in part by an algorithm. The algorithm used by Folkestone & Hythe District Council is produced by Xantura. It screens Housing Benefit claimants and Council Tax Reduction claimants for signs of fraud or error in their claims.

However, evidence has emerged that the Xantura Algorithm is based in part on the applicant’s age, triggering a review of whether the system is lawful.  A Xantura spokesperson had previously said

“No protected characteristics are used in the RBV model.”

Robin Allen QC, a discrimination lawyer who runs the AI Law Consultancy, informed the Shepway Vox Team:

“Using the protected characteristic of age to suggest who might be cheating the benefits system is unlikely to be lawful. Age is not a good proxy for honesty and should not normally be used as such. ”

But of course, every applicant who makes a claim for CTR must give their age. Xantura insists its use of age helps reduce fraud and error, speeds up the majority of applications and does not breach the Equality Act, citing a legal exception for age. Xantura declined to confirm what other personal information is fed into the algorithm, saying it could allow claimants to game the system, but said information provided by claimants could be used in the prevention of fraud and error. So Xantura accept it’s algorithm is used in detecting fraud.

However, F&HDC stated in an FoI response

The Xantura Algorithm doesn’t identify fraud.

But as the figures above indicate, the Council do use the Xantura algorithm to discover fraud and error. This is also made clear in their Risked Based Verification policy.

The algorithm assigns a risk score, low, medium or high to an applicant for CTR. The higher up the scale, the more information the council request to verify the claim, as can be evidenced from the image to the left

Evidence shows the Council fail to inform applicants that their data will be processed by an algorithm.

Article 22(1) of the UK GDPR limits the circumstances in which the Council can make solely automated decisions, including those based on profiling, that have a legal or similarly significant effect on individuals.

“The data subject shall have the right not to be subject to a decision based solely on automated processing, including profiling, which produces legal effects concerning him or her or similarly affects him or her”

Article 22(1)

Campaign group Big Brother Watch in its Poverty-Panopticon has hit out at councils’ use of algorithms, claiming that most of what it has uncovered were “secretive, unevidenced, incredibly invasive and likely discriminatory”. This has led to the Information Commissioner’s Office to investigate the matter.

The Cabinet member responsible for Revenues & Benefits service. Anti fraud and corruption is Cllr Tim Prater (pictured). If you are one of the 10,203 recipients of CTR in 2020/21, whose data has been processed by the Xantura algorithm without your consent, you should contact him to inform him the processing of your data by the Council was in breach of Article 22(1) of GDPR – tim.prater@folkestone-hythe.gov.uk

The Shepway Vox Team

Journalism for the people NOT the powerful