One in every three claims against local councils may be fraudulent or exaggerated, prompting fears from public sector risk managers that the problem is spiralling out of control.
One in every three claims against local councils may be fraudulent or exaggerated, a new survey shows.
The survey, carried out by ALARM - The National Forum for Risk Management in the Public Sector - appears to disprove insurers' estimates that only around 10% of claims are fraudulent.
The survey asked local authority staff across the UK about their perception of fraud when they handled claims from the public. The findings also indicate that in certain areas fraud levels are even higher - some authorities believed that nearly 70% of all the claims they received involved an element of fraud.
It is estimated that £1bn is paid out to fraudulent claimers each year. However, the costs of investigating fraud claims could double the figure. All money comes from public funds.
The survey also shows that 55% of fraudulent claims are opportunist. However, it is thought that councils are increasingly becoming the victims of organised crime with 35% of claims being premeditated.
"The figures evidence a worrying increase in the number of people making fraudulent claims against the public sector, and what they need to realise is that this is not a victimless crime.
"If the problem continues to grow taxes will be raised and vital public services will suffer. Everyone uses these services at some stage so they will feel the impact themselves," said Sheila Boyce, the chief executive of ALARM.
Peter Andrews, the chairman of the Anti-Fraud Special Interest Group, said: "The problem is spiralling and we need to take urgent measures to tackle the perpetrators and make them realise that claims fraud is a criminal offence and is damaging vital services on which vulnerable people may depend."
