A survey of English councils conducted by the soon-to-be-abolished
The spending watchdog said nearly 120,000 cases of fraud resulted in councils being fleeced out of £135 million in 2009, with a "sharp increase" in scams involving the 25% single person council tax discount costing authorities £90 million alone.
There was also an increase in the use fake colleges and addresses to claim student council tax discounts, while some 50,000 properties worth £2 billion had been illegally sub-let or occupied.
Birmingham City Council also uncovered £5.8 million of benefit overpayments.
The commission - one of many public bodies facing the axe under the Government's austerity measures - said next year's "valuable" fraud survey would be its last, and warned that significant council staff cuts could weaken local authority controls.
The study, called Protecting the Public Purse, concluded: "The survey provides valuable information about the performance of local government in tackling fraud. It also helps to identify emerging fraud risks and provides an early warning system for counter-fraud staff."
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