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A rise in public sector fraud, more stress-related sick days and an increase in the number of tribunals could be among the consequences of Government cuts to councils, it has been warned.

A risk assessment document circulated among councillors at Leicester City Council warns that cuts to council coffers could have unintended effects on council business.

Council leader Councillor Veejay Patel said: "The report highlights the scale of the cuts and their potential impact and it's about time the government had a rethink on the level of cuts that are being proposed."

Planned Government cuts mean the authority is planning to axe the equivalent of 382 full-time positions within the next year. Almost 100 positions are vacant, which means about 284 staff lose could their jobs.

The document cites a report by accountants PriceWaterhouseCooper (PWC) warning managers could struggle to combat an "inevitable rise in public sector fraud" as a result of budget cuts. Half of public sector organisations, such as councils, were victims of fraud in the past year – with two out of five people later admitting they did it partly because they feared their jobs were threatened. The PWC report says staff reductions have resulted in fewer resources deployed on internal controls, adding: "the lesson learnt from the private sector is this will increase fraud risk".

Conservative opposition leader Councillor Ross Grant said: "With our internal audit being merged with the county council any potential increase in fraud highlights the need for our audit function to be robust, and for us to maintain an active investigative capacity."

The document includes new research showing that millions of workers across the country are suffering from finance-related stress.

It is feared by some councillors that cuts in staff hours and pay could lead to an increase in stress due to money worries.

The Money Sickness Syndrome report's author, Dr Roger Henderson, said: "Employers should think about how they can help employees get to grips with their financial problems before they get out of hand and make them too ill to work."

One city council human resources boss, who did not wish to be named, said: "These are the consequences of cuts which people won't see. Staff sickness levels and fraud could cost the taxpayer more money than is saved by the cuts."

Mark Irvine, area organiser for public sector union Unison, said: "Any cuts to staff in a department will result in increased workload for remaining employees. This could lead to stress. Cuts to departments which oversee how taxpayer money is safeguarded could cost the authority more in the long run."

Source: http://www.thisisleicestershire.co.uk/news/Cuts-create-rise-sick-days-fraud-says-report/article-2662137-detail/article.html