Detected fraud soars to record £140m

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Public bodies must put more effort into tackling fraud, the Audit Commission said on Monday, as it revealed a record £140m ($273m) in fraudulent claims and overpayments.

Some councils and other public sector bodies pursue fraud vigorously, said Michael O’Higgins, the commission’s chairman – but not all do.

“These are not victimless crimes,” he said, “and some of the fraud is both blatant and shocking. People are stealing homes, pensions, student loans, parking places and benefits, seemingly confident that no one is tracking them.

“They are wrong. We urge all public bodies to put in place the necessary trained staff to work with us.”

The national fraud initiative matches data from a host of records from council tax and benefit claims to transport passes, pension and insurance claims, various licences and other records against one another and against the electoral register. The initiative is being extended this year beyond local authorities and the NHS, with central government departments being invited to submit payroll and creditor data for matching and with new powers allowing the private sector to become more involved.

The outcome of the last exercise in 2006-07, published on Tuesday, reveals that £140m in fraud and overpayment was detected, up from £111m two years earlier – a 26 per cent increase. But the steep rise “does not necessarily mean more fraud is taking place, but that bodies are becoming more successful in uncovering it”, the commission said.

Since the exercise started in 1996, some £450m in fraud and overpayments has been identified at a cost of less than £10m.

Striking individual cases include a man who claimed council tax benefit, income support, incapacity benefit and disability allowance, with his wife claiming carer’s allowance for looking after him, while he in fact ran a market stall and other businesses. At the time he was caught he drove a Mercedes, owned several other cars and had savings of more than £100,000.

Southwark Council alone has reclaimed 30 council homes from tenants not entitled to them, while the Audit Commission estimates that a minimum of £200m will be raised from stopping people fraudulently claiming a single person’s discount on the council tax. One Hillingdon woman had claimed the discount for 15 years while living with her husband.

More than 330 employees have been dismissed as a result of the investigations, more than 16,000 blue badge parking passes have been cancelled, and 106 fraudulent “right to buy” cases, and almost 3,000 instances in which pensions continued to be paid after someone died, have been detected.

More than £24m in overpaid housing benefit was uncovered, a third of that due to fraud, while £4m was reclaimed in income support.

Some councils and public bodies adopt a “zero tolerance” approach, the commission said, but others “do not exploit the information to the full”. Its auditors will report on how vigorously they do so in the future.

Mr O’Higgins underlined that “it makes both moral and financial sense” to take action against fraud.

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