Eric Pickles: Slashing audit checks as council fraud booms

Detected fraud in local councils has jumped £50m in one year – with the biggest scams involving cheating on council tax benefits, unlawfully subletting council homes and false benefit claims.

 You would think Eric Pickles, the communities secretary, and Grant Shapps. the local government minister, would only be too delighted that someone is collecting this, advising councils how to tackle the problem, and saving the taxpayer up to £185m.

But soon you won’t know because the Audit Commission, the body that collects  all this information,  is to be abolished. And to save more money the government is raising the ceiling on councils that needed to be fully audited from £1m to £6.5m next year.

 Perhaps you might think these councils – mainly town and city councils, museums and drainage boards, are paragons of virtue and nobody working so close to the parish pump would dream of defrauding them.

But read the Audit Commission report,Protecting the Public Purse 2011, (summary and download here http://bit.ly/sSfVJG ) and you will find that one parish clerk managed to defraud four councils  out of £63,000 and get an 18 month prison sentence. As the report reveals: “The clerk forged signatures, altered cheques, and made unauthorised payments to herself and her family. ”

The chair of one of the parish councils said, “We have had to take out a £30,000 loan as a result of her leaving us practically bankrupt.”

In another reported case a parish council clerk set up an internet banking account for the council without its knowledge. He used this account to pay himself. The clerk told councillors the council did not require an audit. Councillors believed him and failed to ensure their responsibilities for protecting public money were undertaken properly.

So perhaps it is a bit stupid of ministers to decide that 96 authorities each spending between £1m and £6.5m a year WILL no longer require a full audit – the perfect excuse for the fraudster who conned his local councillors.

Not only is  this an opportunity for fraud but incompetence as well. An investigation I did for Exaro News revealed that among the 96 – a number had recently had their accounts qualified because they were full of mistakes or just plain wrong. One authority, Swanage Town Council, was  qualified twice in successive years. Another council, Tavistock, was told by its auditors to  resubmit its accounts to the council because they had approved completely inaccurate documents.

 You will find the full story and the  list of authorities on the Exaro News website ( http://bit.ly/vWuRFK ). In the meantime you could always ask Mr Pickles to justify what he is doing – his work e-mail is eric.pickles@communities.gsi.gov.uk . Bet you he won’t want to know.