Communities Secretary issues top 10 tips for tackling local government fraud

The Communities Secretary has published a ten point counter-fraud blueprint in a bid to help councils crack down on fraudulent local government claims that are estimated to cost taxpayers £2.1bn a year.

The top ten tips for tackling local authority fraud – drawn up by experts at the National Fraud Authority – are to:

1. Measure exposure to fraud risk
2. More aggressively pursue a preventative strategy
3. Make better use of data analytics and credit reference agency checks to prevent fraud
4. Adopt tried and tested methods for tackling fraud in risk areas – such as blue badge scheme misuse
5. Follow best practice to drive down Housing Tenancy and Single Person Discount fraud
6. Pay particular attention to high risk areas such as procurement and grant awards
7. Work in partnership with service providers to tackle organised fraud across local services
8. Maintain specialist fraud investigative teams
9. Vet staff to a high standard to stop organised criminals infiltrating key departments
10. Implement national counter fraud standards developed by the Chartered Institute of Public Finance and Accountancy.

Eric Pickles said: "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.

"Better prevention, detection and recovery of fraud will help reduce the financial pressure on councils and help protect frontline services.”

The Communities Secretary also urged councils to sign up Kent County Council’s contract framework for credit rating agencies.

The Department for Communities and Local Government revealed a number of scams that had recently been attempted against local authorities. These included:

• an agency worker put in charge of a large budget at one council who had set up a fictitious company and made false claims totalling £110,000. The DCLG said the individual had used a false CV and was later sentenced to two years in prison. The insurance company refused to pay compensation
• a group of sophisticated and organised false identity fraudsters who used fake passports to falsely claim £700,000 of services from councils in London.

Mike Haley, Director of Public Sector Fraud at the National Fraud Authority, said: "At a time when councils are dealing with the impact of radical spending cuts and attempting to protect front line services, fraud can no longer be tolerated. Substantial savings can be made, as demonstrated by the best local authorities, and reducing fraud can make a significant difference to local government finances. This ten-point plan, based on local authority best practice, is a starting point in helping councils get a grip on fraud."

The government’s Counter Fraud Task Force, which was set up in 2010 and tasked with developing a new strategic approach to tackling fraud across the public sector with a focus on prevention, is expected to publish its report later this month.

The National Fraud Authority's Guide to tackling housing tenancy fraud can be downloaded here.