Housing benefit and other fraud is still costing local government more than £100 million, although the figure is falling, the Audit Commission said on Thursday.

The reason for the fall in fraud is due to the increased detection of long-running high-value frauds, particularly among London boroughs, although the commission is calling for more stringent checks.

The value of fraudulent contractors and suppliers has risen from £1.7 million to £2.4 million and there continues to be significant levels of cheque fraud. One growth area has been false housing benefit claims for non-existent asylum seekers by landlords.

The commission called for more action from councils citing the fact that one in six councils does not have an anti-fraud strategy and one in five does not have name police contact. The watchdog called on councils to increase their vigilance against fraudsters.

Andrew Foster, the controller of the Audit Commission, said: "The threat is constant, and authorities cannot afford to drop their guard. Where money goes fraud will follow, and criminals have shown themselves to be very adaptable. There is no substitute for proper fraud prevention strategies, meaningful deterrents and the development of a strong anti-fraud culture. Every pound lost to fraud in local government is a pound not spent on front line services such as education or social services."