Around 96% of the detected cases were false benefit claims. Corruption by council staff was relatively rare, with only 143 cases costing a total of £1.2m uncovered in the past three years. While the commission said most councils were in good order it warned them against complacency.
The report says councils should generate an anti fraud culture by stressing the fundamental importance of probity, financial control and honest administration, and encourage staff and others to blow the whistle on anyone conning the council.They must ensure there are well documented and tested procedures for handling budgets and cash. They should also use computers to the full and agree procedures with the police to ensure management of investigations is improved.
In its research across the country the commission found 97% of councils administering benefit had uncovered fraud, and 81% had suffered at least one other type of fraud. Losses from benefit fraud over the three years totalled £50m, and other losses totalled £12m. When councils ended their accounts in March, almost 12,000 fraud and corruption cases involving at least £10m were being investigated.
The commission's report recommends councils elsewhere set up similar schemes to share information, experiences and expertise. The commission is setting up a dedicated fraud unit to disseminate information about how to fight fraud and to encourage closer ties between councils, government departments and other agencies. Next year the unit will be studying fraud and corruption in the health service. The publication of the fraud report coincided with the release of Regular as Clockwork, aimed at encouraging councils to raise standards of local government accounting.