New checks follow pounds 90m council fraud

COUNCILLORS WHO accept gifts and hospitality will be forced to declare them on public registers under a new law to be announced in the Queen's Speech next month.

Confirmation that ministers will impose higher ethical standards on local authorities comes as the Audit Commission releases its annual report on council fraud today. The commission found that more than one council in five had failed to set up a gifts register despite advice from Lord Nolan's committee on standards in public life that they should do so.

The move follows a deeply critical district auditor's report on Doncaster, where councillors and members accepted trips to sporting events and abused their expense accounts.

The Audit Commission's survey found fraud totalling pounds 89m had been detected in 1997-98, compared with pounds 76m the previous year. Ninety-nine per cent of cases involved state benefits, but disturbing rises in fraud and corruption by councillors and council staff were also found.

The new registers of gifts and hospitality, which will be open to inspection, will be introduced under a local government Bill that will pass through Parliament next year.

The Audit Commission said the fact that 21 per cent of councils did not keep hospitality registers was "cause for concern". In 1993, 42 per cent had no registers.

The Local Government Association has protested that ministers should focus on other areas, such as replacing Compulsory Competitive Tendering with "best value" rules, which will not be included in this year's Bill. "Councils are already forging ahead with government proposals on ethics," a spokesman said.

Housing and council tax benefit fraud cases of pounds 78m were found by the commission last year, 15 per cent more than in the previous year.

The number of offences by councillors and staff is tiny by comparison, but last year it rose to 638 cases compared with 520 in 1995-96.