More than £200,000 of council money lost in fraud and error

Basingstoke and Deane Borough Council lost £216,848.36 of public funds, covering council tax discounts, housing benefits and Covid-19 grants in the 2020-21 financial year.

Meanwhile, the authority managed to prevent future losses of £312,270.07 - meaning it could have lost more than half a million pounds had it not been detected.

This included three fraudulent grants paid out under the Covid-19 business grants, totalling £45,000.

£175,000 was saved after the authority identified premises targeted by individuals suspected to be using the emergency grants for identity fraud.

But the report only listed what was identified, so the actual number could be higher.

The TaxPayers’ Alliance have said that council tax payers are likely to lose out, calling on local authorities to “ramp up efforts to crack down on fraudsters”.

No debate

It was presented to the council's audit committee on Monday, includes more than £120,000 lost as a result of incorrectly applied council tax discount.

Six payments under the Test and Trace Support Scheme, where people on low incomes can apply for a payment of £500 if they have to self-isolate and would lose their income, are undergoing further checks.

The figures did not generate debate at the audit and accounts meeting on Monday, with councillors simply deciding to note the report without comment.

Basingstoke and Deane Borough Council chairs the Hampshire Fraud Group, made up of local authority fraud specialists, and are the regional representative for the national Fighting Fraud and Corruption Locally Board.

'That is a lot of money'

The leader of the opposition on the council, Labour leader Andy McCormick, said that "we will never know the extent" of undetected fraud.

He told The Gazette: "On the basis of the information we have, we don't have a big problem with fraud.

Andy McCormick. Photo: Sarah Gaunt

"It is significant, that is a lot of money, but in the grand scheme of things, when you look at some of the other things going on, it could be a lot worse.

"The information [provided in the report] wasn't enough to give us an idea of the nature of the fraud."

Council 'must ramp up efforts'

But the findings of the report, generated on a biannual basis, has drawn criticism from the TaxPayers' Alliance, which said that councils "must ramp up efforts" to crack down on fraud.

The centre-right think tank's digital campaign manager, Joe Ventre, said: "Fraud is always a twofold blow for hard-working taxpayers.

"Not only is their money wasted, but residents who play by the rules will then be expected to pick up the tab in the form of higher rates.

"Councils must ramp up efforts to crack down on fraudsters and ease the burden on those who pay their fair share."

That point was agreed by Cllr McCormick, who said about the fraudulent Covid grants: "We have to go after these people because it makes a mockery of the legitimate businesses that need help at the minute."

Other findings

The report also found nearly £30,000 was lost for incorrectly applied housing benefits or Universal Credit in 2020-21, with the authority having only recovered £2,000 of the £56,000 of housing benefit overpayments from 2019-20.

But the most public cash lost in a single area was in council tax discounts, where £123,060.42 was lost in the last financial year - the vast majority of which came from incorrectly applied single person discounts.

Adults that live alone, or are the only adult in their property, can apply to have their bill reduced by 25 per cent.

A National Fraud Initiative exercise in 2019-20 found 1,625 cases where potential discrepancies were identified - which resulted in 227 single person discounts being removed.

This was at a value of £121,342.35, and prevented future losses of around £94,500.

A slightly smaller number of potential cases have been identified for 2020-21, with 1,574 matches that will be reported on in November.

The Cabinet Office scheme matches electronic data on single person discounts with the electoral register to identify discrepancies. Fraud or error cannot be confirmed without an investigation on each case.

In other detected losses, almost £13,500 was lost by unauthorised direct debits being taken from the council's accounts, which has been recovered, and another £1,718.07 of ineligible single person council tax discounts.

The report does not give an overall amount of how much the council has recovered, or is working to recover.