Scale of fraud against council from within and without revealed
BIRMINGHAM city council recovered dozens of homes and blocked more than 150 housing applications due to false claims last year.
The authority also investigated more than 100 internal fraud cases relating to staff, most of which concerned overpayments. The council’s fraud report 2017/18 has revealed the scale of the problem it is facing fronts. The key findings were:
912 cases of potential housing fraud identified, resulting in 87 properties clawed back by the council. There were also 152 housing applicants cancelled and four Right to Buy claims blocked.
846 cases in relation to false Council Tax Support claims resulting in £1.1m worth of adjustments to be made. In addition, £826,748 worth of housing benefit overpayments were identified during investigations.
115 referrals to the council’s corporate fraud team (CTF) concerning staff. The cases were worth £700,000 in total. Most of them were concerned with overpayments and procurement related fraud.
Cllr Paul Tilsley (Lib Dem, Sheldon), said he was ‘astounded’ to hear that the annual value of fraud across all sectors of the UK economy was valued at £193 billion, nearly a quarter of the government’s budget.
He said: “We have to stamp this out. It is our money. We could be providing much better services if there wasn’t the amount of fraud taking place.”
Only six people were prosecuted for housing application fraud and one other was cautioned, despite the high number of cases and the fact £8 million worth of property was recovered.
The council stated that while criminal cases acted as deterrents they were time consuming and required a lot of evidence.
The report added: “There are obvi- ous social benefits in ensuring that only those with the greatest need are allocated social housing, but there is also a real financial saving from preventing and/or stopping social housing fraud, particularly in respect of providing temporary accommodation, and losing valuable housing stock through fraudulent Right to Buy applications. We will continue to work with the directorate to further develop work in this area.”
In relation to staff-related fraud the most common case type was payroll which accounted for 37 out of 115 referrals. This included failures to record absences, reduced hours worked, accumulated long term sickness absence, maternity leave and contract termination.
Last year there were 19 salary overpayments of more than £3,000 worth in excess of £118,000 in total.
The report said: “It is disappointing that overpayments are still occurring on such a regular basis, particularly when they arise as a result of managers failing to input a termination date when an employee leaves, as this means payments continuing after the employee has left and requires additional resource in raising a debt to recover the overpayment.”