Fraudsters using Artificial Intelligence (AI) are a growing threat to South Gloucestershire Council’s finances and security, it has been revealed.
The local authority is hitting back by using the technology itself to prevent attacks and scams but is “slow to keep pace with risk”, a council meeting heard.
An annual counter-fraud report said a major initiative led by the government’s cabinet office to match suspicious activity with data held by South Gloucestershire Council unearthed a total of £479,183 that the organisation recovered in 2025/26.
The vast majority of this – £437,468 – was from households claiming council tax single person discount on the basis they lived alone but where the electoral register showed more than one adult there.
Head of internal audit and risk Justine Poulton told the audit and accounts committee that fraud was still a big risk for the organisation, although while the number of cases had doubled in the past six years, the average value of each one had halved.
She told the meeting: “AI-enabled fraud is becoming more prevalent, with fake identities.”
Cllr Ben Burton said: “The report looks at AI from a negative perspective in terms of increasing potential activity and then, more concerningly, is the fact that councils are slow to adopt the technology of AI to counter that threat.”
He asked whether the council could team up with other local authorities to invest in AI collectively to combat the danger.
Ms Poulton replied that AI use across local government bodies was doubling almost monthly.
Finance director Joss Convey said AI was used to look at overall matching information but that this was then followed up by officers on a case-by-case basis.
She said council tax and business rates collection statistics remained “pretty solid” as the team was a keen adopter of AI and data management technology.
The report to the committee highlighted two emerging threats – identity fraud and account takeovers, driven by digital service expansion and weak verification controls, and AI-enabled fraud involving fake identities, forged documents and circumvention of verification systems.
It said: “Local authority capability in harnessing AI to support counter-fraud investigations is slow to keep pace with risk.”
The report said two cases of fraud by South Gloucestershire Council staff were proved in the last 12 months.
By Adam Postans, Local Democracy Reporter