The unit, the first created specifically to target organised gangs, did not even become fully operational until 16 months after it was created, a government watchdog said yesterday. The Audit Commission found the London Organised Fraud Investigation Team (Lofit) stopped benefit to just two claimants since it was set up in 1996. In its report the commission said lack of management controls and a staff time recording system meant it was difficult to tell exactly how much work the 20 agents had done. Lofit was set up by the Department of Social Security and Association of London Government (ALG) to cut the pounds 1bn cost of fraudulent housing benefit and council-tax claims.
It was charged with tracking down landlords and gangs who worked across the capital and who had avoided detection by councils. But the commission found that of 98 cases handled, 12 were fully investigated and of those seven resulted in no further action; 38 were rejected as unsuitable and five others referred to police and other agencies.
The new Rovers, Audis and Renaults the agents were supposed to use for surveillance of suspects were used for private purposes.
An anonymous letter to Alan Williams, Labour MP for Swansea West, said the agents were "playing cards all day and swanning around in brand-new BMWs at the taxpayers' expense". But the Audit Commission report said the unit should continue, because it had potential to halt big fraudsters in their tracks if it were properly managed. It called on the ALG to act with "great urgency" on its recommendations to tighten up monitoring of staff and car-fleet logs.
Iain Duncan Smith, the Conservative spokesman on social security, said: "Since New Labour came to power, the faults in Lofit went unchecked. This is yet another example of New Labour ministers being caught out for not closely following their briefs."
An ALG spokesman said the report was "unfair" and the anonymous letter inaccurate, because the cars involved were not BMWs. "There are bound to be teething problems and ... we do take on board some of their recommendations but the complex nature of the cases mean that prosecutions do take time".
Lofit has in the past been lauded by ministers as a model of how to combat fraud and the Audit Commission had hoped it would be replicated across the country.Reuse content