£215m in fraud loss uncovered after huge inquiry

The National Fraud Initiative (NFI) compared information from 1,300 organisations – including councils, police, the NHS and nearly 100 private companies – to uncover thousands of cases of wrongly obtained benefits, pensions and jobs.

Spending watchdog the Audit Commission, which runs the NFI, has urged the new coalition Government to ensure its departments add their data to the system, and use its technology to track down cheats and save taxpayers' money.

The NFI brings together data on a secure website, allowing participants to carry out their own matches to find possible fraud overpayments. Since its launch in 1996 it has helped detect wrongful payments totalling 664m.

The 215m uncovered in 2008-9 was an increase of more than 50 per cent on the 140m identified in 2006-7, thanks largely to a rise in the number of local authorities using NFI to check up on council tax discount claims.

Checks uncovered 62m worth of wrongful claims by people receiving the 25 per cent single person council tax discount when they were in fact living with another adult. This was almost a five-fold increase on the 13m reported in 2006-7.

They also led to 269 prosecutions, 308 administrative penalties and 441 official cautions. Some 256 members of staff were dismissed or

resigned, 16,535 blue disabled parking badges and 21,534 concessionary travel permits were cancelled and 97 social housing properties were recovered.

Ambulance chiefs in Yorkshire matched payroll and visa data to uncover an employee who worked for several years and was paid more than

190,000 in total despite having no right to work in the UK.

The individual was claiming asylum support on the grounds that he had no income, and his wife was working for a local employer despite also having no right to work in Britain.

Other cases included a Salford householder who claimed 2,200 in single person's council tax discount since 2001 despite living with a partner.

South Tyneside Council identified a man who continued to claim his step-grandfather's pension for years after his death, netting a total of 30,000. After his case was referred to police he was jailed for 12 months.

Other scams included social housing tenants sub-letting properties and illegal workers using false identities to work.

Checks on payroll data from Croydon Council revealed a member of staff was listed as being employed by another authority at the same time. Further investigations revealed the council's employee was working illegally using another person's identity and national insurance number.

The worker was given a four-month prison sentence, while the other person was charged with knowingly allowing their details to be used fraudulently to gain employment.

Audit Commission chairman Michael O'Higgins said: "We simply can't afford to ignore losses to the public purse, especially from fraud.

"Those who steal benefits, pensions, jobs and homes ought to know the NFI is on their trail, and others who fancy trying their luck should realise they will be caught.

"The latest NFI has helped achieve record savings. But it could do more. We are inviting government departments to put their data into the NFI and use its technology to stop the loss of taxpayers' money."