The government is calling for councils to share best practice is tackling an estimated £2.2 billion annual fraud bill.
The Home Office's Local Government Fraud Strategy document calls for the adoption of a "tougher approach" to tackle fraud against local authorities, and for a "new partnership"between central and local government.
Among the steps, local authorities can now use a free online fraud resilience assessment tool, which assesses the extent to which their organisation is protected against fraud.
Other online developments include a fraud checklist site, an e-learning course, and online discussion forum with anti-fraud best practice.
Cabinet Office minister Francis Maude said: "The urgent issue now facing this country is the need to reduce the deficit. Tackling fraud is an integral part of putting finances back on a stable footing and ensuring that tax-payers' hard earned money is used to protect resources for frontline services."
The Home Office strategy document says local government must recognise the cross boundary nature of fraud and adopt best practice to tackle the highest fraud risks. It says central government needs to create the right environment to enable local authorities to protect public funds through the creation of a "positive incentive regime", and to remove barriers to information sharing.
There will also be a review of the use of powers by local authorities and "how they could be harnessed more effectively".
The government says there is £900 million in housing tenancy fraud to tackle, along with £890 million in procurement fraud, over £153 million in payroll fraud, £131 million in council tax discounts and exemptions fraud, £46 million in "blue badge" fraud, £41 million in grant fraud and £5.9 million in pension fraud.
The document says the abolition of the Audit Commission, changes proposed to local auditing arrangements, and the creation of a single fraud investigation service to tackle benefit fraud will "considerably alter" current fraud governance arrangements.
"These factors suggest that this is the time to put forward a new and tougher approach to tackle fraud against local government, and to introduce new arrangements to ensure that local government has a resilient response to the changed conditions," says the paper.
As an example of gains already made, the paper cites Birmingham City Council, which is said to have saved £25 million in the last five years as a result of regular data matching. In addition, Ealing Council is set to make nearly £7 million of savings from taking action against fraudulent claims for single person discount from council tax, and similar action by West Berkshire Council is expected to yield £4 million in three years.
In other fraud tracking news, in January, the National Audit Office reported that the Department for Work and Pensions had lost £1.1 billion in overpaid benefits in the last year, because of failures to use historic data and systems to detect errors on claimants' forms.