COUNCILS have been urged to do more to protect the public purse, despite uncovering millions of pounds worth of fraud last year.

Spending watchdog the Audit Commission said good work was being done by many councils, but warned this was “only the tip of a huge iceberg”.

In its annual detected local government fraud survey, it said 7,700 frauds were uncovered by North-East councils last year, at a cost of £5m.

In Yorkshire and Humberside, 15,900 frauds were detected, costing local councils £13.4m.

The overall cost to councils in England of fraud committed against them was £135m last year, although this was only that which was detected.

This comprised £99m worth of benefit fraud, £15m of council tax fraud and £21m worth of other types of fraud, including false insurance claims, abuse of the disabled parking blue badge scheme and illegal sub-lets of council properties.

The Audit Commission also said councils must watch out for procurement fraud in purchasing, sub-contracting, and outsourcing of services, and workers from outside of the UK pedalling false identities and bogus qualifications.

Chairman of the Audit Commission Michael O’Higgins said: “Preventing and detecting fraud has never been more vital. Every pound saved can be used to strengthen public services.”

Jeff Garfoot, head of finance at the region’s biggest local authority, Durham County Council, said it was committed to tackling fraud and had a benefit fraud team which last year detected more than £575,000 of benefit overpayments.

Mr Garfoot cited a recent prosecution brought at Durham Crown Court as a result of work carried out by the authority.

A Spennymoor man was found to be claiming housing benefit and council tax benefit for himself and his wife.

However, his wife had been in employment since 2001 and was earning more than £1,250 a month.

Investigators found he had been overpaid benefit totalling £30,757.

The fraudster was given a 51-week jail sentence, suspended for two years.

Local Government Minister Bob Neill told The Northern Echo: “It is more important than ever that councils are getting value for taxpayers’ money and rooting out waste.

“Every year, fraudsters are fleecing councils out of millions of pounds that should be being spent on protecting frontline services.

“Local authorities need to continue working to clamp down on the fraudsters stealing from the public purse, improve detection, increase protections and recover losses.”