Communities and Local Government Secretary Eric Pickles has pledged £16million over the next two years to catch criminals and retrieve losses so that cash can be put back into public services.
The Counter Fraud Fund is designed specifically to tackle non-benefit related fraud, such as council tax swindles and disabled blue badge abuse draining the public purse of over £2billion on an annual basis. The Government say that local authorities also frequently fall victim to grant thefts, where individuals, community groups and organisations misuse money awarded to them for a specific purpose.
In order to qualify for their share of the cash, councils must provide evidence of how they plan to combat the problem and recoup money.
Making the announcement at the annual conference of the Chartered Institute of Public Finance and Accountancy (Cipfa), Mr Pickles said: “Fraud costs hard-working taxpayers £2 billion per year.
“We are supporting councils to go further in catching fraud felons, and today I am proud to commit £16million over two years to ridding this scourge.
“The challenge fund will be allocated to the most innovative local authorities who plan to generate the most effective savings.”
Sharon Taylor, chair of the Local Government Association finance panel, said: “Councils are by far the best-performing part of the public sector when it comes to collecting tax and tackling fraud and have a much better track record than central government.
“This extra funding will help the determined efforts of local authorities to ensure that money from the public purse is not taken dishonestly but needs to be put into context.
“Councils are tackling £20 billion-worth of cuts over this parliament.
“Fraud is an ongoing issue and Government could better help councils to tackle it through longer-term funding rather than one-off pots of money.”
A new counter-fraud centre, run by Cipfa, has been tasked with helping local authorities with initiatives.
Chief executive Rob Whiteman said: “Public services across the UK are striving to meet rising demand while dealing with ongoing financial pressures.
This funding is hugely welcome, it will put resources into protecting taxpayers’ money at the front line and every pound saved increases the amount that can be spent serving communities across the country.”
While news of the additional funding is likely to be welcomed by councils, he urged them to consider selling off ‘unused’ assets such as land and buildings.
Mr Pickles said: “With £220 billion worth of assets, and £2.5 billion of that earmarked as surplus, it is time to start asking: ‘what good is that empty, mothballed office block to the taxpayer?’”
The call came following a warning from the Local Government Association of a £5.8billion funding gap between March and the end of 2015/16.
Ms Taylor added: “If the public sector is to find really big savings, then Government agencies and the NHS must stop working in isolation and start sharing office space with each other and local authorities. Where assets are earmarked for sale, councils have a responsibility to residents to get the best value for money.”