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Last Updated: Tuesday, 30 May 2006, 13:27 GMT 14:27 UK
Public sector fraud fight grows
Pound notes
The public sector is the UK's biggest fraud victim
Councils and other public bodies in England have become more successful at detecting fraud by claimants, a report by the Audit Commission says.

Its two-yearly survey, called the National Fraud Initiative (NFI), detected 33% more fraud in 2004/05 than in the previous survey.

The value of these frauds amounted to some 111m.

The survey found 2,497 overpayments to dead pensioners, and more than 3,000 bogus claims for housing benefit.

Among the other frauds the initiative helped public bodies to detect were:

  • tenancy fraud among council and housing association tenants
  • abuse of the right-to-buy system for former council homes
  • illegal attempts to get jobs by failed asylum seekers
  • people who had overstayed their UK visas.

Value for money

The Audit Commission is the public watchdog which tries to ensure that bodies like local authorities spend their money wisely and provide good value for money.

It covers more than 11,000 organisations spending more than 180bn each year.

The chief executive of the Audit Commission, Steve Bundred, warned fraudsters he would step up his organisation's reach.

"For the future, the reach is being extended further, to include frauds such as claims for student and single-person discounts for council tax," he said.

"The savings to public bodies from participating in NFI are therefore huge."

The next two-year NFI will also include frauds involving misuse of freedom passes and residents' parking permits, non-declaration of company directorships by members and officers of public bodies, and housing benefit claims by those refused a visa to enter the UK.

Data matching

The National Fraud Initiative aims to help the staff of the nearly 1,300 organisations which take part to root out fraud by what is called "data matching".

The commission is able to compare the information it receives from participants, allowing it to spot areas where loopholes may exist.

It also permits officials to locate instances where - for instance - someone is claiming housing benefit for two separate properties in two different areas, or where someone is claiming benefit while working.

Prosecutions were brought against 396 people for false housing benefit claims as a result of the work carried out in 2004/05.

Among the culprits, the NFI discovered 327 NHS staff and 2,690 council employees who had been carrying out housing benefit fraud.

But the commission warned that despite the NFI, some local authorities were struggling to deal with even high-priority cases that have come to their attention - often where the responsibility for making investigations had been outsourced.

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