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Cases of fraud detected in local government over the past two years have doubled following a crackdown by the Audit...
Cases of fraud detected in local government over the past two years have doubled following a crackdown by the Audit Commission and councils, according to a report published yesterday.

The number of fraud cases uncovered has increased from 83,000 in 1993-94 to 166,000 in 1995-96. Over the same period, the amount of stolen council money unearthed rose from £34 million to £69.5m.

'The number of cases currently being investigated suggests there is an increase in organised fraud,' said director of audit support Paul Vevers. 'You've always got to assume that there's much more fraud in the system than we detect.'

The main perpetrators of organised fraud are private landlords and groups of people submitting large numbers of multiple applications.

'We're not trying to suggest that there is more fraud in local government than in other bits of the public sector,' said Mr Vevers. The report shows only 1% of the fraud is perpetrated by council staff.

Around 97% of cases detected are false or multiple benefit claims, accounting for £55m last financial year. However, the remaining 3% of fraud, perpetrated in student grants and housing renovation grants, accounted for £14m in lost money over the same period.

The commission has set up a network to tell councils about new kinds of benefit cons, and estimates that 140 cases of fraud have been prevented via the network.

The government's Fraud Bill, announced at the Conservative Party conference and already being consulted on, will make it easier for councils, government agencies and the Royal Mail, for example, to exchange information that can be used to catch perpetrators.

The commission has piloted data matching, a computer-based system for detecting student award and housing benefit fraud in London and Manchester, and so far saved £4m.

Already 250 councils have used data matching, by which names are compared between lists of claimants. The commission wants to set up a national information-sharing network next year, and hopes all councils in England and Wales will have used data matching by April 1998.

'Councils do not check for fraud as regularly as you would expect,' said Mr Vevers. The rigour of checks varies widely between councils, and few make checks which prevent fraud.'

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