Leeds city council has spent more than £16,000 on employing private investigators in three suspected fraud cases.
The authority was one of several councils criticised by privacy and civil liberties campaign group Big Brother Watch.
It claims that public authorities are increasingly using surveillance by third parties to bypass legislation outlawing snooping.
The group’s research found Leeds used third party investigators – including one private detective - three times in the past two years, at a total cost to the taxpayer of £16,147.85.
One organisation was commissioned in connection with a “fraudulent compensation claim”. On two other occasions, third parties were hired in relation to a children’s services case.
While the first case was carried out under the provisions of RIPA (Regulation of Investigatory Powers Act 2000), the other two were not, Big Brother Watch said.
Explaining its reasons in a Freedom of Information Act request, the authority said children’s services surveillance is normally arranged in child protection cases and where it is suspected that the parent caring for the children has breached their agreement.
Big Brother Watch found that between 2010 and 2012, at least 40 public bodies, including the Department for Transport, the Driving Standards Agency and numerous local councils, have used private investigators.
According to the research, 14 organisations used private investigators without any authorisation under the Regulation of Investigatory Powers Act 2000, which is supposed to regulate surveillance.
Another Yorkshire council, York, revealed it has been spying on its own staff.
Nigel Richardson, director of children’s services at Leeds City Council, said: “Surveillance is only undertaken in a very limited number of cases. Where we have used these methods, it is with the best interests of the children or young people involved in mind. The type of cases when surveillance would be used centre on agreements that have been put in place to ensure that certain individuals do not have contact with a child or young person due to the risks involved.
“If we believe that these agreements have breached, surveillance may be used to confirm if this is the case, but it is rare for us to do so.”