More News » Audit Commission reveals highest ever levels of council fraud detection

NEARLY £200M of fraud has been detected by English councils in 2013/14 – the highest amount for a generation and ten times the 1990 figure, the Audit Commission has revealed.

In its latest – and last – report on fraud in local government ‘Protecting the Public Purse 2014: Fighting Fraud Against Local Government’, it captures a zeitgeistian snapshot of fraud in English local authorities, something it has been tracking since its first report in 1990.

It does so by using its statutory power to compel English councils to provide details on the fraud they detect on annual basis.

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. In the early days, it created a common language with which to report fraud.

“By allowing councils to make peer comparisons, the commission’s work has helped councils to benchmark their individual performance against local and national figures. 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 the end of March 2015 and the Counter Fraud Team move to CIPFA.

The volume of detected cases of housing benefit and council tax benefit fraud fell by 1% nearly 47,000, but rose in monetary terms by 7% to £129m

Between 2009/10 and 2013/14 the number of detected Right to Buy fraud cases rocketed six-fold to 193 cases, worth £12.3m while ;there was also a tripling in the number of detected cases of social care fraud to 438, worth £6.2m. There was also a three-fold increase in the number of detected cases of insurance fraud (to 226, worth £4.8m).

This was further fuelled by the government’s 2012 legislation to encourage tenants to use the Right to Buy scheme, including a significantly increased discount – over £100,000 in some parts of the UK. In the two years between April 2012 and March 2014, when the new discount applied, detected Right to Buy frauds leaped by over 400%.

The volume of detected cases of housing benefit and council tax benefit fraud fell by 1% to nearly 47,000, but rose in monetary terms by 7% to £129m.

More worryingly, there was a 14% fall in the number of cases of fraud detected in 2012/13 and a further 3% drop in the last year to 104,000.

The value of detected cases of non-benefit fraud was up 2%, to £59m, while the number of detected cases of non-benefit fraud fell 4% to around 57,000.

The report found that there has been a six-fold increase in the number of council homes recovered from housing tenancy fraudsters in the past five years by non-London councils, and in England as whole it was up by 15% in the last year to 3,030.

It expressed remorse that despite “an increasing number of councils that have played their part in the fight against fraud, there are still 39 councils (of which 35 are district councils) that did not detect a single case of non-benefit fraud”, down from 88 in the previous year.

The commission’s first comparison of the levels of fraud in schools, having taken a baseline measure last year showed detected fraud in maintained schools rose by 6% and was mostly perpetrated by staff.

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.

Newman urged the government to compel local authorities to keep reporting on fraud, to “help preserve the high levels of transparency and accountability”. He highlighted the results from those councils maintaining exposure.

“Although we will be turning off the lights at the commission, I hope the spotlight on identifying and preventing fraud will continue'”, he said.