By Liz Stephens

People fraudulently claiming single person’s discount on their council tax are costing councils millions, the Audit Commission revealed today.

The commission also found that almost 50,000 council homes are being occupied unlawfully – enough to re-house the 64,000 families currently living in temporary accommodation.

The total value of fraud in housing and council tax benefits was estimated at £200 million by the commission.

The findings were revealed in a highly critical report called Protecting the Public Purse, which says councils are not doing nearly enough to tackle fraud.

Steve Bundred the commission’s chief executive said: “It has never been more important that councils fight fraud. Every pound lost to cheats is a pound that can’t be used for people in real need.”

Perhaps most worryingly, the commission also urged councils to reassess their own counter-fraud plans and be on the lookout for fraudsters looking for jobs within the council, where they are able to perpetrate further crime.

However, the chair of the Local Government Association Margaret Eaton defended councils, saying they were working hard to beat the problem.

“Councils are dedicated to bearing down on cheats to keep council tax as low as possible for the vast majority of honest, hard-working tax payers,” she said.

There were some councils who had taken steps to stop fraud, the report found.

In Croydon, council anti-fraud staff found that one tenant had claimed over £135,000 in benefits by committing identity theft.