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Councils catch fraud worth £15.6 million in West Midlands

Officials stopped 10,900 fraud scams aimed at local authorities in one year

Councils in the West Midlands recovered 416 properties from tenancy fraudsters.

Fraudsters were caught stealing £15.6 million from West Midland councils last year.

Officials cracked 10,900 fraud cases in the region, watchdog the Audit Commission has revealed.

But the Commission said it was concerned that more fraud would go undetected in the future - because authorities were being forced to cut back on staff involved in investigations.

Scams included claiming council tax benefit or housing benefit which people were not entitled to.

Other frauds include not paying enough business rates, abusing disabled parking concessions or “blue badges” and false insurance claims.

The figures also include pay, expenses and pensions fraud committed by council staff.

On top of this, councils in the West Midlands last year recovered 416 properties from tenancy fraudsters.

These included people who provided false information to get a council house or flat, or people who “sold” the property to a third party- handing over the key in return for cash.

The figures, for the 2012-13 financial year, reflect the scale of fraud taking place and the success of local authorities in detecting it.

But the Audit Commission said it was concerned that authorities would find it harder to fight fraud in the future because they were losing staff.

Of councils in the West Midlands, 24 per cent said they were cutting back on staff involved in fraud detection.

While the reason for these cuts was not given, authorities across the region have been forced to reduce staff numbers in a range of departments as a result of cuts in grant from central government.

Funding for local councils in the West Midlands fell by £104 million this year alone, according to research by the House of Commons library.

And the number of cases successfully detected was actually down from 13,900 the year previously.

The Audit Commission said this could reflect a fall in the number of frauds actually committed, but it was more likely to mean that fewer were being stopped.

It said in the report: “We believe that fraud is endemic and that the level of detected fraud is significantly affected by the level of resources councils devote to identifying and

investigating fraud, how effectively they use those resources; and how effectively they record fraud.

“Organisations that do not look for fraud, or do not look in the correct way, will not detect it.”

And it continued: “Counter-fraud professionals have expressed concern to us that their councils’ cuts in investigative resources will mean they will detect less fraud.”

Audit Commission chairman Jeremy Newman said councils were placing greater emphasis on detecting tenancy fraud.

He said: “There is no doubt our findings show councils increasingly out-smarting the housing tenancy fraudsters. This shows what councils can achieve by working effectively together in partnership, sharing and adopting best practice.”

Across the country, councils uncovered 107,000 cases of fraud with a total value of £178 million.

Housing benefit and council tax benefit frauds accounted for £120 million of the total revealed.

Commission chairman Jeremy Newman said: “We should be celebrating that local government has detected some 107,000 fraud cases with a value of £178 million in 2012/13.”

For the first time, councils were required to list frauds affecting maintained schools separately, revealing 191 cases totalling £2.3 million, some 86 of which - with a combined value of £1.9 million - involved internal fraud.

Communities minister Baroness Stowell said: “It is good that councils detected £178 million of fraud last year, but they need to go further.

“Councils and tax-payers are losing £2 billion a year from this criminal activity. By tackling fraud, councils can help save money to protect frontline services and keep council tax down for law-abiding citizens.”

Nationally, councils recovered some 2,642 homes last year from tenancy fraudsters, who illegally sub-let local authority properties for profit.

Fraud of this kind is estimated to cost the £845 million a year, or £1.8 billion when housing associations are included.

 

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