Counter Fraud Fund to assist fraud investigations of local councils

A fund of millions of pounds to help councils recover taxpayers' money lost every year to fraud has been announced by Local Government Secretary, Eric Pickles.

At around £16m, town halls are able to bid for their share of the Counter Fraud Fund only after they can prove how their intentions for the cash will help combat fraud. This comes after statistics have been released that show around £2bn is lost each year through fraud.

The intention is that the fund will assist local councils to set up their own investigative capacities to solve and prevent fraud. The remit of the funds purpose does not cover cases of benefit fraud.

Addressing the Chartered Institute of Public Finance's annual conference, Mr Pickles detailed the scale of the fraud and the risk it posed to the finances of local administrations. He then announced the fund that will go towards 'ridding the scourge' of fraud from town halls.

He said: "Fraud costs hardworking taxpayers £2 billion per year. We are supporting councils to go further in catching fraud felons, and today I am proud to commit £16 million over 2 years to ridding this scourge.

"This challenge fund will be allocated to the most innovative local authorities who plan to generate the most-effective savings"

Calls for innovative financial planning were also made by Mr Pickles who urged councils to strip away 'idle assets' such as disused buildings and redundant brownfield land, saying:

"Councils should also be channelling their energies into getting idle assets off of their books. 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?'"

There has been the suggestion among ministers that the Chartered Institute of Public Finance and Accountancy should set up a national Counter Fraud Centre to take over operations from the fraud division of the Audit Commission.