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Fraudsters cost us billions and find new ways to cheat

Fraud against public bodies in Britain costs £20.3 billion a year. Photo: Gareth Fuller/PA Wire/Press Association Images

If you pay council tax - get angry. What follows below could make you take a stand against the cheats costing us billions.

For every law abiding council tax payer - this is an outrage. For those unable to access scarce local authority services - it is infuriating. Cheats are robbing billions from local councils. Now we have details of new figures and new cons.

Fraud against public bodies is costing £20.3 billion a year - every penny sapped from the hard-pressed tax payer. Council losses account for well over £2 billion of this total - it is a nothing short of a national disgrace.

ITV News' Consumer Editor Chris Choi reports:

Now a new report from the Audit Commission says the number of cons is still multiplying, as fraudsters find new ways to rip-off the communities they live in.

Cons involving business rates are rising - with fraudsters misusing of rate relief. Councils take over management of the Social Fund from Jobcentre Plus in April. This provides grants to help people facing immediate financial difficulty, which is worth £130.1 million – an attractive prospect for fraudsters. Schools have also been one of the rising new targets with internal and external frauds.

Councils take over management of the Social Fund from Jobcentre Plus in April. Credit: Danny Lawson/PA Wire/Press Association Images

The report lists case studies of successful fraud prosecutions. Among them:

  • A fraudster claiming she was homeless, who used a false driving licence and immigration status. She claimed eight years’ worth of housing benefit totalling £144,000, and received a 12 month suspended sentence for fraud.
  • A husband and wife used fake identities to receive a discount of £38,000 to help purchase a £125,000 property under Right to Buy legislation. They were found guilty of receiving property by deception and were given custodial sentences. The council recovered its losses and regained the property.
  • A school administrator who fraudulently claimed overtime valued at about £55,000, settled her credit card bills through school accounts and gave money to her partner. The total fraud was valued at £142,000. She was sentenced to two years imprisonment, and the school’s Head teacher was sacked for poor supervision.

I've spoken to Paul Bicknell at Stoke-on-Trent City Council, where they have pioneered an attempt to persuade members of the public to report fraudsters.

‘Know a cheat in your street?’ is the slogan and it has worked.From April to the end of June, a total of 515 reports were made to the authority’s anti-fraud team, compared to 289 in January-March. Some types of calls more than doubled. There were 88 about suspected council property tenancy fraud (up from 40), while those about people claiming benefits but not disclosing income went up from 30 to 70.

Allegations about people failing to declare work rose by 77 percent (44 to 78). The most prevalent type of benefit fraud in Stoke-on-Trent is known as ‘living together fraud’, where a person claims benefits on the basis they are single and unemployed, when they are actually living with a partner who’s working. There was a 42 percent jump in reports of such cases, from 92 to 131.

It makes sense for members of the community to stop turning a blind eye - after all it is our money and our services that are being hit so badly. Now many more councils will launch similar whistle-blower schemes - so if you know a scam is going on let them know.