What is fraud, bribery and corruption?

What is fraud?

Fraud can be defined as taking or attempting to take something to which you know you are not entitled.  It can involve theft, false accounting, deception, forgery and extortion.  Fraud can range from small, one-off occurrences, through to serious organised crime.


The Fraud Act 2006 introduced a single offence of fraud which can be committed in one of three ways:

  • Fraud by false representation.  Examples include paying Council Tax using a forged card or providing false information on a job application form

  • Fraud by failing to disclose information.  Examples include failing to disclose income or savings when claiming benefits.

  • Fraud by abuse of position.  Examples include employees abusing their position in order to grant contracts or discounts to friends, relatives or associates.


What is bribery?

Bribery can be described as requesting, receiving or agreeing to receive an inducement for an action which is illegal, unethical or a breach in trust.  Inducements can take the form of gifts, fees, rewards or other advantages such as retaining business.  For example, a council official receiving a sum of money to ensure a contract is issued to a specific company.


What is corruption?

Corruption is the abuse of entrusted power for private gain.  It occurs when people use their position or powers to influence decisions or policies or allocate funds in ways they are not supposed to, in order to make a gain for themselves or for someone else. In local government, councillors and appointed officials are entrusted to carry out their duties in a way that serves the public interest.  Corruption occurs when they use their power to influence decisions or policies in ways they are not supposed to in order to achieve a private benefit.  For example, a planning officer who disregards the local development plans and grants planning permission to a senior officer in return for a job offer or preferential treatment.


Due to their hidden and secretive nature, it is difficult to build a true picture of the financial cost of fraud, bribery and corruption within local government.  However, recent research estimates the annual cost of fraud in the UK at £193.4 billion, which is broken down as follows: 

Private sector  £144 billion 
Public sector  £37.5 billion
Individuals  £10 billion
Not-for-profit sector (charities)   £1.9 billion


(Annual Fraud Indicator 2016) 

Within these figures it is estimated that fraud against local government, such as council tax reduction fraud, payroll fraud and procurement fraud, accounts for £7.9 billion of public sector fraud. 


Although fraud against local authorities is commonly perceived as a victimless crime, it can have a substantial impact on residents, vulnerable individuals and businesses within the local area.  Losses attributable to fraud reduce the financial capacity to provide services and may have a dramatic impact on the wellbeing of residents within the community.  For example, the local family in temporary accommodation who cannot be allocated a council home because of fraudsters illegally sub-letting council homes for profit.  This has been shown to have a long term detrimental effect on health, education and socio-economic opportunities for the family concerned.