By David Williams
17 September 2009
Councils are losing hundreds of millions of pounds a year from tax and benefit fraud, the Audit Commission has warned.
The local government regulator has recommended councils develop a
‘zero-tolerance’ culture to cheats.
In Protecting the public purse, published on September 15, the watchdog estimated that councils were losing £90m a year on fraudulent claims for single person council tax discount alone.
Derek Elliott, the commission’s head of counter-fraud practice, said 35% of the 21.8 million taxable homes in England were registered for the single person discount. Elliott conservatively estimated that 4% of claims were false.
‘That is straight out of the pocket of honest taxpayers,’ he told Public Finance. ‘As long as you’re not at the capping level, you’ll find its them that have to pay a bit more.’
He called on authorities to pay more attention to fraud, adding that councils should be more consistent with prosecutions. ‘There need to be deterrents,’ he said.
The commission found dishonest applications for council housing and illegal subletting had prevented 50,000 legitimate claimants from being housed.
Elliott said increased partnership working could have increased councils’ vulnerability to housing fraud. Tenancy audits, which used to be carried out regularly, might have been less rigorously used by outside agencies, he said.
The report suggested direct social care payments were open to abuse, and that procurement could also leave councils vulnerable to uncompetitive bids from cartels of contractors.
The commission has drawn up a checklist for councils to use to ensure their anti-fraud systems are working properly. It points to CIPFA guidance on appropriate and proportional controls for direct social care payments.
Jim Gee, chair of the Centre for Counter Fraud Studies at Portsmouth University, applauded the commission for highlighting the issue, but said the report did not say enough about what councils could do practically to fight fraud.
‘Councils will need more than a checklist to improve,’ he said. ‘Self-help can take a very long time. Who is going to help local authorities improve?’
The direct payment system was an example of policy being designed centrally with little consideration of the potential for it to be abused, he said.
The Local Government Association pledged that councils would not be complacent in the face of fraud. It added that the commission had cited many examples of innovative town halls working to identify and reduce scams.
The commission is to begin conducting annual surveys to monitor emerging risks and changing levels of fraud and its associated costs, starting with the 2008/09 financial year.
17 September 2009
Councils are losing hundreds of millions of pounds a year from tax and benefit fraud, the Audit Commission has warned.
The local government regulator has recommended councils develop a
‘zero-tolerance’ culture to cheats.
In Protecting the public purse, published on September 15, the watchdog estimated that councils were losing £90m a year on fraudulent claims for single person council tax discount alone.
Derek Elliott, the commission’s head of counter-fraud practice, said 35% of the 21.8 million taxable homes in England were registered for the single person discount. Elliott conservatively estimated that 4% of claims were false.
‘That is straight out of the pocket of honest taxpayers,’ he told Public Finance. ‘As long as you’re not at the capping level, you’ll find its them that have to pay a bit more.’
He called on authorities to pay more attention to fraud, adding that councils should be more consistent with prosecutions. ‘There need to be deterrents,’ he said.
The commission found dishonest applications for council housing and illegal subletting had prevented 50,000 legitimate claimants from being housed.
Elliott said increased partnership working could have increased councils’ vulnerability to housing fraud. Tenancy audits, which used to be carried out regularly, might have been less rigorously used by outside agencies, he said.
The report suggested direct social care payments were open to abuse, and that procurement could also leave councils vulnerable to uncompetitive bids from cartels of contractors.
The commission has drawn up a checklist for councils to use to ensure their anti-fraud systems are working properly. It points to CIPFA guidance on appropriate and proportional controls for direct social care payments.
Jim Gee, chair of the Centre for Counter Fraud Studies at Portsmouth University, applauded the commission for highlighting the issue, but said the report did not say enough about what councils could do practically to fight fraud.
‘Councils will need more than a checklist to improve,’ he said. ‘Self-help can take a very long time. Who is going to help local authorities improve?’
The direct payment system was an example of policy being designed centrally with little consideration of the potential for it to be abused, he said.
The Local Government Association pledged that councils would not be complacent in the face of fraud. It added that the commission had cited many examples of innovative town halls working to identify and reduce scams.
The commission is to begin conducting annual surveys to monitor emerging risks and changing levels of fraud and its associated costs, starting with the 2008/09 financial year.
