Association of District Councils Housing Chair Paul Jenks and Association of Metropolitan Authorities Housing Chair Margaret Moran have written to the Department of Social Security accusing ministers of being oblivious to the realities of the scheme, by penalising councils which fail to meet 'crude and arbitrary' targets for uncovering fraud.
'It was made quite clear to your officials...that the national target of £229 million was unrealistically high and would fail to give authorities a meaningful incentive to take on additional fraud staff. Your officials ignored this advice', they have told DSS Under Secretary Alistair Burt.
'Recent surveys carried out by our associations have confirmed our initial views'.
'We are most concerned that penalties are being introduced due to the apparent poor performance of local authorities, when responsibility for the situation rests squarely with the department'.
They call on the DSS to delay imposition of the penalties until it has held more talks with councils on the best way for the government to support their anti fraud work.
Dudley MBC is one council which is complaining about being set unrealistic detection targets.
It appointed anti fraud staff well before the government's initiative, and expects to uncover £250,000 of fraud this year.
'But the government's target for Dudley is over £500,000 per year... Setting arbitrary targets does not help anyone, it simply distracts from the main task of providing a prompt and efficient benefits service', said Tim Sunter, chairman of Dudley's finance committee.