Chartered Institute of Public Finance and Accountancy on Fraud

FRAUD - Council tax scams are the most common type of fraud committed against local authorities, analysis out today has found.

CIPFA’s annual fraud and corruption tracker found council tax scams make up 78% of all fraud at local government level with an estimated value of £30.6m.

A total of 71,000 cases of council tax fraud were detected in England in 2018-19 - an increase of 22% on the 57,894 cases in 2017-18. 

CIPFA estimated that for UK local authorities the total value of fraud detected or prevented in 2018-19 was approximately £253m, averaging roughly £3,600 per fraud case.

This is up from the estimated value of £302m in 2017-18, with a similar average of £3,600 per case detected or prevented.

Fraud was detected across multiple areas, such as disabled parking concessions, housing, business rates and adult social care.

Council tax fraud in 2018-19 included 44,051 cases of single person discount, where the council taxpayer claims they are the only person in a property when they are not. 

There were a further 8,793 cases of council tax reduction claims, where the council taxpayer claims against an incorrect household income.

The cost of business rate fraud decreased to £8m from £10m the previous year and overall it represented just 2% of the total number of fraud cases detected or prevented in 2018-19.

Rob Whiteman, CIPFA chief executive, said: “Fraud continues to be a critical issue for local authorities. Many councils have worked diligently to implement new counter-fraud strategies, and the figures tell us those efforts are working.

“The unlawful diversion of funds away from local authorities only adds further stress on vastly underfunded public services. The sector is moving in the right direction, but only a greater focus on collaboration and preventative measures will help create long-lasting change.”

The report found that there has been a decrease in authorities that have a dedicated counter fraud team – from 51% in 2017-18 to 40% in 2018-19.

The institute said staff across all public sector work functions should receive fraud awareness training in order to better identify fraud risks, fraud attempts and implement effective controls.

CIPFA’s findings are based on responses from 142 local authorities.

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