CIPFA 2014: Pickles announces funding for councils to tackle fraud

2 Jul 14

A £16m fund to help councils tackle fraud has been launched by Local Government Secretary Eric Pickles at today’s CIPFA annual conference.



Addressing delegates, Pickles said the money could be used to support initiatives aimed at cutting losses caused by frauds including council tax, blue badges abuses and theft of grants.

Bids from town halls for the new fund, which must be made by September 5, will be judged on the potential financial savings and benefits offered. They will also be judged on their  contribution to partnership working, sustainability, feasibility and innovation,’ he said.

‘Fraud costs hardworking taxpayers £2bn per year. We are supporting councils to go further in catching fraud felons, and today I am proud to commit £16m over two years to ridding this scourge.

‘This challenge fund will be allocated to the most innovative local authorities who plan to generate the most-effective savings.’

The announcement comes as CIPFA prepares to take over public sector counter-fraud work from the Audit Commission when it closes next year.

Responding to the announcement, CIPFA chief executive Rob Whiteman said: ‘This funding is hugely welcome, it will put resources into protecting taxpayer’s money at the frontline and every pound saved increases the amount that can be spent serving communities across the country.

‘Public services across the UK are striving to meet rising demand while dealing with on-going financial pressures. CIPFA’s new Counter Fraud Centre will work with them to ensure that they have the tools they need to continue to protect the public purse while continuing to deliver front line services.’

Pickles also urged councils to do more to put ‘idle assets’ to profitable use, as he said the money raised from sales of empty buildings and redundant land to help pay for local services or avoiding council tax increases.

He highlighted that the government was allowing councils to use some of the money used from asset sales to fund public service reform.

He said: ‘Councils should also be channelling their energies into getting idle assets off of their books. 

‘With £220bn worth of assets, and £2.5bn of that earmarked as surplus, it is time to start asking: “what good is that empty, mothballed office block to the taxpayer?”’

His speech stressed that councils could not expect a more favourable financial climate under any foreseeable government and should use counter fraud measures, asset sales and encouraging local economic growth as means of raising money.

In a combative session of questions, Guy Ware, strategic director of enabling at the London Borough of Lambeth, highlighted his authority faced cutting £115m, almost a third of revenue budget.

'To suggest that tackling fraud can cover that is either ignorance or mendacity,' he said to applause. 'Fraud is important but marginal, so is business rate retention and so is the New Homes Bonus.'

Pickles said councils were free to raise more money by increasing council tax if they could win a local referendum.

'Show a bit of leadership instead of being mildly insulting and make that case for a council tax increase,' he said. 'If you do and you win, you won’t hear a peep out of me.'

Pickles said he foresaw a local government sector in which different councils exercised different powers according to what they were willing to take on and negotiate with central government, with the City Deals serving as a model.

Responding to the fraud announcement, LGA finance panel chair Sharon Taylor said: 'Councils are by far the best performing part of the public sector when it comes to collecting tax and tackling fraud and have a much better track record than central government. 

'This extra funding will help the determined efforts of local authorities to ensure that money from the public purse is not taken dishonestly but needs to be put into context. Councils are tackling £20bn worth of cuts over this Parliament. Fraud is an ongoing issue and government could better help councils to tackle it through longer-term funding rather than one-off pots of money.

'Local authorities are leading the public sector in saving money through smarter use of their assets. Where assets are earmarked for sale, councils have a responsibility to residents to get the best value for money, rather than selling to the first bidder. If the public sector is to find really big savings then government agencies and the NHS must stop working in isolation and start sharing office space with each other and local authorities.'

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