Council corruption sets off alarm bells in Britain: Russell Hotten finds that underhand practices are also a worry at home

THERE is mounting concern in Britain that corruption among public officials and businesses is rising, though the problem pales when compared with Italy's.

Britain has not yet uncovered any Olivettis or Fiats, but there are several organisations tainted with suspicion.

Most corruption seems to involve local councils and health authorities, and has worsened following the drive to privatise services and put more out to tender.

The Audit Commission has begun a big inquiry into local authority corruption, which many believe will demand greater accountability and scrutiny of public bodies. On Friday, it published a damning report on Lambeth Council, identifying 'unlawful expenditure' and mismanagement.

Alan Doig, a lecturer at the University of Liverpool who has studied corruption, said: 'There is a level of corruption developing that is becoming entrenched. People are taking advantage of a weakness in the system.'

Both the Serious Fraud Office and Metropolitan Police have stepped up investigations into abuses of contract tendering involving big British companies. Earlier this year, two businessmen were found guilty of bribing staff at British Petroleum. Last year, the SFO successfully prosecuted a corruption case involving Exxon. Other cases awaiting trial involve NEI, the engineering giant, Shell, and contracts for the Channel tunnel.

Yet there is still a feeling among investigators that they are only uncovering the tip of an iceberg. Mr Doig said: 'The police are under-resourced to deal with corruption because the public does not think it important. Unlike other crimes, there is no immediacy or visible victim of corruption.'

Only occasionally does corruption become a national issue - perhaps the most celebrated case happened in the 1960s, involving John Poulson, the architect, and local politician T Dan Smith. Scandals featuring national political figures are rare, though the public perception persists that most large British companies have one or two MPs in their pockets.

This view is not helped by the growing number of former ministers and civil servants who take directorships at companies that they used to deal with when in office. Knighthoods for industrialists (whose companies may have donated to Conservative Party funds) also do little to encourage faith in the system.

The nature of British politics helps to prevent much of the bribery that occurs in other European countries. MPs do not have to raise money to fight elections and there are limits to how much parties can spend.

Neither do national politicians get too closely involved with public administration and the handing out of contracts. 'It all means that politicians are not left with the sense that favours have to be returned,' said Mr Doig.

Few people doubt that further cases of corruption will arise. Privatisation, and the creation of semi-privatised agencies, have loosened the checks and balances.

Bodies such as the Public Accounts Committee and the Audit Commission have vigorously pursued mismanagement. But as Mr Doig said: 'The Government has given very little attention to maintaining the same level of accountability after privatisation.'

Very often, a public official found to be taking bribes will be eased out of office rather than prosecuted. Sweeping such things under the carpet is a peculiarly British way of doing things, Mr Doig said. But it is inadequate if corrupt practices are to be stamped out.