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23.10.14

Councils detecting record levels of fraud – Audit Commission

Fraud detection rates by councils in England are at their highest level in 25 years, according to a new report by the Audit Commission.

The report – Protecting the Public Purse 2014: Fighting Fraud Against Local Government – revealed that £188m of fraud was detected by local authorities in 2013-14, a ten-fold increase since 1990.

Jeremy Newman, chairman of the Audit Commission, said: “Protecting the Public Purse has helped local government foster greater transparency and accountability around its response to fraud.

“I believe it also encouraged the sector to develop a real passion for fighting fraud – a passion that has ensured that £188m of fraud was detected by English councils in 2013-14: the highest total value we have recorded and a 6% increase on the result we reported for 2012-13.”

At one time, housing tenancy fraud, such as illegal subletting, was viewed by some councils as a low priority, according to the Audit Commission. But, these days, councils are doing well in turning the tide against housing tenancy fraud. For instance, there has been close to a six-fold increase in the number of council homes recovered from housing tenancy fraudsters in just five years by councils outside London.

In addition, in the last year, the value of detected cases of housing benefit and council tax benefit fraud rose by 7% to nearly £129m, while the number of detected cases fell by 1% to nearly 47,000.

Protecting the Public Purse uses data, collected yearly, in the only comprehensive survey of local authorities in England, to reveal the only accurate figures for the level, type and value of fraud over the financial year.

However, this will be the final Protecting the Public Purse report, before the Commission closes at the end of March 2015 and the Counter Fraud Team move to CIPFA, the Chartered Institute of Public Finance and Accountancy.

Communities minister Lord Ahmad of Wimbledon, who leads the DCLG’s push against local government fraud, said: “Criminals who defraud councils and hardworking taxpayers are committing a serious offence and we have been clear that catching them must be a priority for local authorities.

“This government is investing millions of pounds into helping councils to do this and thereby clamp down on cheats who are, simply put, ripping off taxpayers.”

But the Commission argued that the improvements in addressing fraud in local government are at risk; with councils under continued financial pressure, as any reduction in fraud investigators is matched by a similar fall in the detection of housing benefit fraud.

Furthermore, changes in government policies such as Right to Buy and social care choice, may have unintended consequences and heighten fraud risks, it warned.

Claire Kober, the chair of the LGA’s Resources Board, added that the transfer of responsibility for tackling benefit fraud to government’s new Single Fraud Investigation Service is likely to mean councils will have fewer resources with which to tackle other types of fraud.

She said: “While government has announced one-off funding to help local authorities in the short-term, this needs to be made permanent to ensure councils have adequate funding to carry out this important work in the years to come.”

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