Councils could save £2bn a year by cracking down on fraud, communities secretary Eric Pickles has said.
Mr Pickles launched a new 10-point counter-fraud blueprint, which he said could help local authorities in England protect frontline services at a time of cuts.
Money currently lost to fraud and error equated to around £95 for every household in England, he said.
Mr Pickles cited the National Fraud Authority Annual Fraud Indicator, which estimated that local government could be saving taxpayers £2.1bn a year by cracking down on fraud in housing tenancy; procurement; pay, pensions and recruitment; council tax; grants; and blue badge schemes.
Compiled by NFA experts at Mr Pickles request, the 10-point blueprint includes recommendations to use credit rating agencies to stop tax evasion and benefit fraud and to carry out staff background checks to prevent fraudsters and organised criminals infiltrating key posts.
Councils are also advised to measure their exposure to fraud risk; pursue a more aggressive prevention strategy; pay particular attention to high-risk areas such as procurement and grant awards; and maintain specialist fraud investigative teams.
Mr Pickles, left, said: “It’s time to get tough and take on the fraud cons. At a time when we need to cut the national deficit and government waste, cleaning up fraud could save the taxpayer over £2bn in recovered cash currently being fraudulently stolen or lost to tax cheats.
“Councils should carry out better credit checks through credit rating agencies before giving over discounts or benefits. They should properly vet staff in key positions and put stricter controls on who can use the council credit card.”
Bruno Rost, from credit rating agency Experian, added: “We’ve already saved local authorities tens of millions of pounds on council tax fraud but much more can be achieved through a better joined up approach.
“There are over 2,000 different providers of social housing in the UK and they don’t share their data. It’s an open charter for fraud.
“We think social housing tenancy fraud could be reduced by £200m. If the same methods were applied across the whole of the UK this would result in savings to the taxpayer in excess of £600m.
“If you add the cost of temporary accommodation, the potential savings are well in excess of £1bn.”