Environment Canterbury reaches settlement with First Direct after 'lengthy investigation' into subsidy fraud

Tuesday, 27 March 2018

Danny Watson, who has spinal muscular atrophy, says the Total Mobility scheme is good in theory, but not in practice.

Environment Canterbury (ECan) has reached a confidential settlement with a taxi company whose drivers were previously alleged to have defrauded a subsidy scheme for disabled people.

ECan had conducted a 'lengthy investigation' over allegations some taxi trips under the Total Mobility Scheme had been overpaid before announcing it had reached the settlement with First Direct on Monday.

ECan says there's 'no evidence to indicate that First Direct as an organisation sought to fraudulently overcharge the Total Mobility Scheme'.

'There was no evidence to indicate that First Direct as an organisation sought to fraudulently overcharge the Total Mobility Scheme,' ECan said in a statement.

'First Direct and Environment Canterbury look forward to working together to improve the Total Mobility Scheme for the benefit of all stakeholders.'

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No further comment would be made, the statement said.

First Direct has been approached for comment.

The Total Mobility Scheme is a nationwide programme, administered by ECan in Canterbury, that provides half-price taxi fares for people with limited mobility.

The regional council reported the alleged fraud to the Office of the Auditor General and met with the Serious Fraud Office in 2016 after it became concerned invoiced taxi trips could not be matched with GPS data.

Forensic accountants at Deloitte were commissioned to investigate fare data from 2015.

The investigation found suspicious fares from drivers at three taxi companies. The companies were understood to be First Direct, Blue Star and Gold Band taxis.

Deloitte estimated the potential loss to the regional council was about $420,000.

Blue Star Taxis chairman Brent Webber said 'there was nothing in it, really'. He was reluctant to comment on the situation, but said 'I think you'll find all three companies have reached a confidential agreement'.

The taxi companies all still have agreements with ECan to provide the Total Mobility service in greater Christchurch, as do Driving Miss Daisy and Total Care Mobility.

Users of the service have 'smart cards' that gives them a half-price fare up to a maximum of $35 per trip. The NZ Transport Agency and ECan pay the taxi company the remainder of the fee, at 30 per cent and 20 per cent, respectively.

Christchurch man Danny Watson, who was born with spinal muscular atrophy, was a regular user of the scheme until November last year, but said he bought a van in part because of frustrations with the service.

He said it was a good idea in theory, but 'in practice, I don't think it's administered very well'.

The taxi companies contracted to ECan were supposed to provide a 24/7, seven-day a week service, but Watson alleged 'they haven't been doing that for a long time'.

About 240,000 trips were made using the service in the greater Christchurch area between 2016 and 2017. As of November last year, there were 7516 active registered clients.

ECan is currently proposing, through its Long Term Plan consultation, to reduce the subsidy cap from a maximum of $35 to $30.