Public sector fraud is costing Britain £108m

Fraud in town halls and the NHS has risen to record levels, with greater numbers of GPs, opticians and pharmacists attempting to fiddle the system, according to figures published by the Audit Commission today.

Fraud in town halls and the NHS has risen to record levels, with greater numbers of GPs, opticians and pharmacists attempting to fiddle the system, according to figures published by the Audit Commission today.

Fraud amounting to more than £108m was uncovered in the past year. Councils in England and Wales detected £104m in illegal payments, up 18 per cent on 1997-98, while fraud in the NHS doubled to £4.7m. For the first time corrupt GPs have been highlighted in the statistics, with more doctors than ever making false claims for prescriptions, vaccinations and night visits. The figures relate only to fraud which has been indentified as having occurred; the suspected amount of undiscovered fraud is far higher.

In its report Protecting the Public Purse, the Audit Commission found councils and health authorities had made some progress in tightening controls. However, detection rates in some areas were worryingly low and previous warnings about staff monitoring had not been heeded. One in five councils penalises those found committing fraud.

Although detected amounts represent what the commission calls the "tip of the iceberg", this is the first year the £100m barrier has been broken. Housing benefit fraud remained the biggest risk facing local authorities, making up 99 per cent of all detected cases; the value of benefit fraud rose by 22 per cent to £95m. The auditors pointed out that fraud by politicians remained low, with suspect claims by council staff and councillors themselves affecting one in eight town halls.

Fraudulent payments to contractors and suppliers remained at high levels, with firms being offered work by corrupt officers in the NHS and local authorities. Fraud by GPs, dentists, opticians and pharmacists had trebled to more than £3m, yet only 25 doctors had been charged and dismissed for their conduct.

The commission welcomed the Government's drive to create a Directorate of Counter Fraud Services for the NHS, (which is being launched today) but pointed out that progress in other areas had been "disappointingly slow". Andrew Foster, the commission's controller, said the reports showed the need for tougher deterrents. "Councils in particular have responded positively to the challenge by detecting more fraud than ever. NHS trusts and health authorities should learn from [this] and satisfy themselves that they are doing everything in their power to protect the public purse."

The report criticises the NHS for failing to review and simplify regulations for reimbursement of treatment fees, rules being abused by corrupt GPs and other medical practitioners. "In some areas, the risks remain high, particularly in primary care areas provided by GPs, pharmacists, dentists and opticians. The regulations for reimbursement are complex," the report states. "They remain open to misinterpretation and manipulation and the sheer volume of forms pro-cessed hinders the level of detailed checking possible."

Fraud among opticians in particular has risen, with the detected level of illegal claims rising from just £31,000 in 1996-97 to £1.3m in 1998-99. Unlike patients of GPs and dentists, there is no central patient history record for optical patients. The commission recommends one should be set up.