Fraud against councils across south Essex is putting millions of taxpayers’ money at risk each year, a new report has revealed.

The Counter Fraud and Investigation Service, which is funded by councils across the region, has outlined in an annual report that £5.3million of fraudulent activity was detected across Southend and Thurrock Councils in the past 12 months.

The hardest hit was Thurrock where £3.4million was detected but just £941,155 was recovered. In Southend, £1.9million was lost with £354,300 recouped.

Council fraud can range from social housing fraud – where tenants attempt to sub-let council properties for profit – to employees manipulating systems from the inside.

In the five years the counter fraud team has been operating, it has detected fraud worth £11.5million in Thurrock and £5.4million in Southend. Of the combined £17million, just £6.7million has been recovered.

One of the most prominent cases in Southend occurred in two years ago when housing manager Stuart Burrell conned taxpayers out of £307,000.

The council employee claimed he did it in order to help get homeless people off the streets but to do so he approved payments, which would normally be rejected, and manipulated invoices.

The 43-year-old’s actions caused the amount of council employee fraud recorded last year to rise by 5,000 per cent.

Other cases detailed in the report include someone using their father’s blue badge for parking after he had died and a couple who received between £1,600 and £1,800 per month in rent by illegally sub-letting a three-bedroom council property while living in a privately rented house.

A spokesperson for Southend Council said: “This recent report highlights how, across a number of areas, nearly £2million of fraud has been successfully detected against the council in the last year, with a further £1.8m under investigation.

“This can range from housing tenancy fraud, to blue badge fraud, to mandate fraud, whereby a criminal mimics a ‘well known’ supplier and attempts to change the supplier’s bank details at the council to receive money fraudulently.

“Unfortunately there are also isolated instances where our own staff carry out fraudulent activities against us, and the large percentage rise seen in the figures for worker fraud in 2018-19 is attributable to one such case, involving one individual, which led to the recent and well publicised court case and prosecution.

“As these cases demonstrate, we will always seek to take immediate action, and where necessary take the appropriate legal action and prosecute to the full extent of the law.”

Councillor Shane Hebb, deputy leader of Thurrock Council and cabinet member for finance and transformation, said: “We have made it very clear that we will not tolerate those who defraud the taxpayer and will continue to take tough action to protect the public purse.

“We have invested in our Counter Fraud team to make sure the public funds that the council administers are protected from fraud and economic crime, and last year successfully detected £3.4million of fraud, recovering £941,155 and preventing further ongoing fraudulent loss continuing.”

“We have also been sponsored by the Government to support other local authorities suffering from serious and complex frauds.

“Despite working tirelessly to trace potential criminal proceeds early on in investigations and present cases for confiscation by the courts, unfortunately some offenders have no assets to confiscate.”

Marc McAuley, Counter Fraud Services Lead, Chartered Institute of Public Finance and Accountancy (CIPFA) said: “Fraud is a growing blight for the public sector, weakening trust in local authorities and drawing important resources away from services that could otherwise be improving the lives of vulnerable people. The risk of fraud increases as services go digital – fraud in public organisations increased by £45million between 2016-2017 alone.

“The only way to tackle the problem is by shifting the focus from catching fraud to fraud prevention. This can only be achieved at an organisational level, with the organisation and all elements of the supply chain working together to identify the systematic weaknesses that allow fraud to happen in the first place.”