In a response to a request made by the group under the Freedom of Information Act, Caerphilly revealed that Conquest Surveillance Services of Blackwood had been paid £48,205 in 2010-11 and £62,487 in 2011-12 – a total of £110,692 over the two years.
Outlining the reason for the surveillance, the council said: “To monitor staff who were suspected of committing a crime against the authority eg fraudulently obtaining sick pay, theft of council property/ supplies etc.”
Caerphilly is the only council in Wales to have used private investigators and one of only four in the UK to have done so.
The report suggests that councils like Caerphilly are using a loophole in the law to get round restrictions on surveillance activity introduced by the current UK Government.
It says: “We are seriously concerned there is a gap in UK law emerging around surveillance and the ability of third parties to conduct surveillance operations without proper regulation.