Thirty-nine councils failed to detect any non-benefit fraud in 2013-14 despite a record-breaking amount of fraud being detected by local authorities, the Audit Commission has revealed.
In its last report in the Protecting the public purse series before the Audit Commission closes in March, it found the total value of fraud increased from £178m in 2012-13 to £188m in 2013-14 – the highest in 25 years of reporting – despite the fact the total number of cases fell from 106,898 to 104,132 between the two years.
The 2.5% reduction in caseload was largely due to falls in London boroughs and metropolitan districts, as unitary authorities and district councils actually detected more fraud in 2013-14 than the previous year.
This is despite the fact that, according to the report, district councils employed the fewest fraud investigators and saw their average full-time equivalent (FTE) fraud investigator numbers reduce by 19%, while unitary authorities and metropolitan districts saw their capacity reduced by 14% and 13% respectively.
The Audit Commission said councils reported the single most important factor in tackling fraud was “the need to ensure they have enough counter-fraud capacity”. Between 2009-10 and 2013-14, the mean average number of FTE fraud investigators employed by councils declined from 5.2 to 4.7.
In the past five years, councils have shifted their focus from benefit fraud to non-benefit fraud as local authorities will no longer deal with benefit fraud from 2016.
All benefit fraud investigation will transfer to the Single Fraud Investigation Service, run by the Department for Work & Pensions. Funding worth £16m, awarded under competitive bidding, to help councils refocus their efforts on non-benefit fraud during the transition will end at the same time.
While the Audit Commission said it was “encouraging” that the number of councils that failed to detect any non-benefit fraud fell from 79 in 2012-13 to 39 in 2013-14, the report added: “Our experience suggests it is extremely unlikely that no non-benefit fraud occurred at these councils. Of those, 21 district councils and one unitary authority reported no detected non-benefit frauds in both years.”
Even though there has been a shift in focus to non-benefit fraud, the value of housing benefit and council tax benefit fraud rose to nearly £129m from £120m, although the number of cases fell marginally from 46,964 to 46,960.
Between 2009-10 and 2013-14, councils consistently detected more council tax discount fraud than any other type of non-benefit fraud. In the most recent year, almost 50,000 cases worth £16.9m were found.
In 2013-14, councils detected 1,474 cases of internal fraud, generating £8.4m in losses. In 2012-13 there were 1,315 cases, which cost councils £16.8m.
The report said: “The more councils look for fraud, and follow good practice, the more they will find. Increasing levels of detection may be a positive sign that councils take fraud seriously rather than a sign of weakening of controls.”