DWP signs six-figure deal for search software ‘to identify shell companies’

To support a pilot exercise, data-led unit dedicated to tackling fraud has awarded a contract to business information firm, which has previously worked with the department through much smaller engagements

The Department for Work and Pensions has signed a six-figure deal for data and search services to help specialist units root out shell companies perpetrating fraud against the government.

Newly published commercial documents reveal that, on 21 July, the DWP awarded a one-year contract worth £218,650 to Bureau van Dijk – a software and services firm which claims to possess the world’s largest database of information on private companies.

“The contract [provides] a company and directorship search facility which allows DWP to identify shell companies who are potentially committing fraud [or] error or are not genuine,” the contract-award notice said. “It also identifies entities committing benefit fraud, fraudulent employment [or] fraudulent claims of self-employment.”

Shell companies are those with very limited or no assets and business operations. While they can exist for legitimate reasons, they are also often used as a means of perpetrating fraud, money laundering or tax evasion, or for obscuring the true worth of an individual or organisation.

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The procurement notice indicates that the agreement with Bureau van Dijk relates to a pilot programme of activity related to companies and directorships being undertaken by the department’s Integrated Risk and Intelligence Service (IRIS).

According to a DWP policy report issued last year, IRIS constitutes a team of “experts in monitoring risks and using data-matching and analytical expertise to help identify fraudulent activity”. Suspected fraud is then flagged up via the provision of “digital evidence is critical to help our trained professionals make the right decisions on a case-by-case basis”.

The DWP originally created a Risk and Intelligence Service in April 2018, with a remit to use data and analytics to help combat fraud and error in its administration of benefits. The unit was expanded in the early weeks of the coronavirus crisis to subsume other data and intelligence teams, to create IRIS.

The department’s policy report claimed that, working with other units across the department, the enlarged anti-fraud team “disrupted or corrected over 298,000 claims during 2020/21, without… [which] nearly £3bn would now be in the hands of criminals”.

The DWP, and arm’s-length body the Pensions Regulator, have previously worked with Bureau van Dijk in a series of deals for the provision of its Fame research tool for seeking information on both private and public companies. These contracts have been worth between £20,000 and £70,000 – meaning that the contract for specialist searches targeted at shell companies is by the department’s largest engagement to date with the data firm.

Sam Trendall

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