RLA : RPI : Councils chided on fraud response

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the December 1999 / January 2000 issue

Councils chided on fraud response - December 1999 / January 2000

Local councils have been criticised for being slow to take up new powers and opportunities in the fight against benefit and other fraud.

The latest Audit Commission report Protecting the public purse puts the level of detected fraud in the year to March 1999 at £104m 18 per cent up on the previous year. By far the largest part of this - £95m concerned benefit fraud, and in particular housing benefit and council tax benefit fraud.

The Audit Commission cites the case of one woman who fiddled over £19,000 in such benefits while working part time for two local councils (plus another employer), receiving rent from a property she part owned and living with a partner in full time employment. She was found out when she applied for a student award.

Another case concerned a council worker who set up accounts for 13 fictitious landlords to whom he had arranged for benefits to be paid for fictitious tenants. All together he milked the council for which he worked as a housing benefits manager of over £400,000.

'Verifying new claims is a key part of councils' counter fraud strategies, together with rigorous checks on information that is provided in order to renew claims', said the Commission. 'Councils need to check whether a claimant's circumstances have changed materially in ways that affect the amount of benefit that should be paid'.

Progress putting in place a Department of Social Security Verification Framework which addressed these issues had been slow with fewer than 50 councils implementing the full framework by March this year.

Councils were also criticised for being slow to appoint inspectors with a power of access to business premises, hotels and landlord controlled houses in multiple occupation under powers given them by the Social Security Administration (Fraud) Act 1997. 'These are high risk areas for benefit fraud', it said.

Only one in five councils had used their powers under the Act to impose penalties on fraudsters as an alternative to prosecution. And a third of councils had not set up 'whistleblowing' arrangements for staff staff despite implementation of the Public Interest Disclosure Act 1998.

'The key to reducing claimant fraud is to prevent false claims from entering the payments system. An important part of this is to have rigorous and consistent checks in place to verify the identities of applicants', said the Commission.

other artilces from the December 1999 / January 2000 issue