Soaring benefit fraud costs city £875,000

THERE has been a huge rise in benefit fraud in Edinburgh, with taxpayers cheated out of £875,000 in a year.

The amount of money being scammed has surged by 9.3 per cent on a year ago.

A total of 124 people have been prosecuted or fined in the last year for cheating the system and claiming housing or council tax benefits to which they are not entitled.

City chiefs insist that they will continue to take a hard line on tracking down money claimed fraudulently. The false benefit claims have been identified by a team of ten city council investigators in the year to April 2010. The figure only relates to those who have been caught, so the real cost could be far higher.

Councillor Phil Wheeler, the city's finance leader, said: "The vast majority of people who receive benefits are genuinely entitled to them. However, there is a minority who will do all they can to abuse the system.

"We continue to work with the Department for Work and Pensions to get the message out that if you are going to claim benefit fraudulently, you will be caught and suffer the consequences."

The council's investigators can have cases referred from a range of sources, such as council benefits processors, the national benefits hotline or the National Fraud Initiative.

Among the main types of benefit fraud are people who work but do not declare an income, couples who live together but do not declare having a partner, and those who do not admit to savings.

The investigators gather evidence then invite the suspect for a recorded interview. They then decide if fraud has been proved and can impose an administrative penalty – usually about a third of the fraud amount. If the suspect refuses an interview or the sanction then the case is passed to the procurator fiscal.

In 2009-10, 44 administrative penalties were imposed – up 47 per cent on a year earlier – while 27 cautions were given, compared with 30 in 2008-9. A further 53 cases led to a prosecution.

In one case last year, Nicola Smeaton, 36, claimed 64,331 of housing benefit as the sole tenant of a property in Parkhead Crescent. Fraud investigators found that her partner was the live-in owner of the home after secretly filming them both entering and leaving the property over several weeks.

Councillor Iain Whyte, finance spokesman for the Conservative group on the city council, said: "It is extremely important that they attempt to do all they can to get the money back.

"Even more important is stopping the fraud in the first place. The more cases they investigate, the more they will deter potential fraudsters.

"Defrauding the council is defrauding all other council tax payers. It is not a victimless crime because everyone else ends up having their bills increased."