Posted 08.11.12
A new report on local government fraud says that councils are targeting their investigative resources more efficiently and effectively, detecting more than 124,000 cases of fraud in 2011/12 amounting to £179 million.
But it urges them not to drop their guard, as new frauds are emerging in areas such as business rates, Right to Buy housing discounts and schools.
Protecting the public purse 2012: Fighting fraud against local government gives the results of the Audit Commission's annual survey of English councils.
It says that, despite these detection rates, more can still be done. The National Fraud Authority (NFA) estimates that the total amount of fraud in the UK costs every adult in the country about £1,460 a year. Fraud targeting just local government exceeds £2.2 billion per year.
The NFA estimates that housing tenancy fraud, including unlawful sub-letting, costs £900 million per year. This is the single largest area of loss to fraud in local government, and it lengthens waiting lists for legitimate housing applicants.
But the Audit Commission's research shows that councils are hitting back, recovering nearly 1,800 homes last year with a total replacement value of nearly £264 million.
Housing and Council Tax Benefits frauds between them account for more than half of all the council fraud losses detected, valued at £117 million. Nearly £21 million of false claims for Council Tax discounts were detected last year.
Fraudsters are also targeting councils' purchasing of goods and services, with 187 cases of procurement fraud uncovered in 2011/12, worth more than £8 million to the public purse.
In addition to these long-established threats, councils' counter-fraud teams are spotting new fraud risks, including those relating to business rates where evidence is emerging of fraudulent misuse of rate relief.
The report also warns councils to be vigilant as they take over management of elements of the Social Fund from Jobcentre Plus in April. This Fund provides grants and loans through Local Welfare Assistance to help people facing immediate financial difficulty, and was worth £130.1 million last year - an attractive prospect for fraudsters.
The Right to Buy has also been targeted, as have grants to individuals, community groups and voluntary organisations, including grants for housing renovation, adult social care, and arts and sports activities.
