Councils uncover £178m frauds

Updated: 

Handcuffs frame the word 'fraud' among newspaper cuttings

Local councils uncovered 107,000 cases of fraud with a total value of £178 million last year, a new report has revealed.

But a large majority (76%) of non-benefit frauds were detected by a minority (25%) of councils, leading to calls for all local authorities to review their policies to ensure they were doing everything they could to catch cheats.


Some 79 district councils found no non-benefit fraud at all.

The annual survey, by the Audit Commission, found that the total number of frauds detected in 2012/13 was down 14% and their cash value down 1% compared to the previous year.

The average value of each fraud was up by 15% to £1,664.

Housing benefit and council tax benefit frauds accounted for £120 million of the total revealed.

Commission chairman Jeremy Newman said: "We should be celebrating that local government has detected some 107,000 fraud cases with a value of £178 million in 2012/13.

"Most of the non-benefit fraud was identified by the top quarter of councils, which lead the way in the fight against fraud.

"If the other 75% councils had found as much, we would see much higher overall rates of fraud detection.

"Not to detect a single case of non-benefit fraud does raise concerns about the priorities and resources in those councils to tackle fraud.

"I would urge all councils to review their local policies to ensure they are doing all they can to detect and record fraud cases."

For the first time, councils were required to list frauds affecting maintained schools separately, revealing 191 cases totalling £2.3 million, some 86 of which - with a combined value of £1.9 million - involved internal fraud.

Free schools, foundations and academies are not overseen by the spending watchdog.
Councils recovered some 2,642 homes last year from tenancy fraudsters, who illegally sub-let local authority properties for profit.

Fraud of this kind is estimated to cost the public purse the equivalent of £845 million a year.
Communities minister Baroness Stowell said: "It is good that councils detected £178 million of fraud last year, but they need to go further.

"Councils and tax-payers are losing £2 billion a year from this criminal activity. By tackling fraud, councils can help save money to protect frontline services and keep council tax down for law-abiding citizens."

Peter Fleming, chairman of the Local Government Association's Improvement and Innovation Board, said: "Councils work very hard to identify those who are cheating taxpayers, in spite of cuts to funding, and will continue to do the best they can to deliver value for money for residents.

"Last year the LGA helped devise and launch Fighting Fraud Locally, the first national framework to tackle fraud against councils, which is continuing to prove a success.

"However, we are concerned councils' abilities to tackle non-benefit fraud could be compromised if Government plans to transfer fraud staff to a proposed national benefits fraud agency are realised."