Audit Commission says council tax cheats are costing local authorities millions
Fraudsters falsely claiming to live alone are costing councils almost £90 million a year, according to a report out today.
Research by the Audit Commission suggests local authorities are losing out on almost £2 million a week through cheats wrongly claiming single person discount (SPD) on their council tax.
The spending watchdog is urging councils to crack down on fraud as part of moves which it says could save hundreds of millions of pounds a year.
Its report, Protecting the Public Purse, highlights particular threats that have not been subject to the same scrutiny applied to the likes of benefit fraud.
It estimates that people falsely claiming the 25% SPD on council tax, available to householders living with no other adults, is costing taxpayers £90 million a year.
It also estimates that 50,000 properties are being kept off social housing lists in England because of tenancy fraud, and warns councils to be wary of fraudsters seeking employment in town halls.
And it says the recession is increasing the risk of fraud as counter-measures come under budgetary pressure and the incentive for people to commit fraud rises.
Derek Elliott, one of the report’s authors, said: “The need to fight fraud has never been greater.
“Demand on council services is going up at a time when income is decreasing and the expectation is that council tax will not rise.
“We do not want fraudsters thinking this is an ideal environment to take advantage of, and we want councils to be aware of the threat.”
The Audit Commission is urging councils to assess anti-fraud measures, raise awareness, encourage whistleblowing and work with others to tackle the problem.
It is also launching an annual survey to track and highlight developing risks from fraud.
Audit Commission chief executive Steve Bundred added: “Every pound lost to cheats is a pound that can’t be used for people in real need.
“The report is a comprehensive look at threats facing town halls. It calls on councils to urgently reassess their counter-fraud plans.
“They also need to ensure that staff understand, and have faith in, whistleblowing arrangements.”
The Conservatives raised concerns that the calls to combat fraud could result in council inspectors demanding entry into people’s homes to uncover whether people qualified for SPD.
They said some councils were already forcing taxpayers to agree to spot checks before awarding the discount.
Shadow local government minister Bob Neill said: “Councils need to do more to tackle town hall fraud, but this is not a green light for intrusive inspections of people’s underwear drawers. Sensible use of data matching can help identify people fiddling benefits.
“Laws supposed to tackle terror and serious crime have resulted in an unjustified extension of snooping by local authorities.
“Conflicting and confusing messages are still being given out by the arms of government about the proportionate use of state powers.”
The Local Government Association (LGA) said councils were never complacent and would look carefully at the report’s recommendations.
Councillor Margaret Eaton, LGA chairman, said: “Councils are dedicated to bearing down on cheats to keep council tax as low as possible for the vast majority of honest, hard-working tax payers.
“The Audit Commission’s report is chock full of examples of town halls making sure their residents are not ripped off by fraudsters.
“One of the reasons the commission has been able to highlight some types of fraud as an issue is because of the hard work of many local authorities which have tracked down cheats and taken action against them.
She added: “In these tough times when councils are facing a perfect storm of falling revenues and growing demand for services they will not turn a blind eye to crime.”
Sam Younger, chief executive of homelessness charity Shelter, said: “The Audit Commission is right to address the issue of unauthorised sub-letting for profit, which is not only an abuse of precious public resources and social housing stock but also extremely unfair on the 1.8 million households currently trapped on council housing waiting lists.
“People who unknowingly rent a property that is unauthorised sub-let social housing have no rights or protection and are the innocent victims of profiteers.”
Topics: Britain, Council, Economy, England, false claims, finance, fraud, fraudsters, Governance, Local Authorities, single person discount, SPD, tax cheats, UK, United Kingdom
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