The Government is failing in its duty to protect the citizen from fraud because it refuses to spend the relatively small sums required, it is claimed.
Watchdog the Fraud Advisory Panel highlights what it calls “a failure of the state” in Which Way Now? Evaluating the Government’s Fraud Review, published today as the public consultation period closes. Financial crime is officially recognised as costing the country at least £16 billion a year, in other words, £655 for every household.
What they say
Panel chairman Rosalind Wright, a former Director of the Serious Fraud Office said “The review recognises that the harm caused by fraud is second only to the trafficking of the most dangerous drugs. But Whitehall’s words, however bold, are no longer enough. The Home Office and the Treasury refuse to make fighting financial crime a priority despite its huge impact on ordinary people and business, particularly small firms. The review’s proposals will prove pointless unless they are properly financed.”
The Review’s Interim Report (March 2006) contains findings of fact which amount to a crushing indictment of current policies, according to the panel. There is “a lack of willingness by police forces to accept reports of fraud outright” because of “a lack of capacity…even when reports are taken little is done with them”. “Whether a fraud gets investigated can depend on whether the victim can organise and finance the investigation…The chance of a low or medium value fraud against the private sector being investigated is very small”. There is “poor information about the scale, nature and extent of fraud and the harm it causes to the economy and society”. “There is no national policy for tackling fraud” and this results in uncoordinated activities that fail to make the best use of resources.
The review’s final report adds that “many” uninvestigated serious frauds include “cases involving organised crime and possible terrorist connections”. The review produces a package of recommendations for strengthening the police response to fraud (including the creation of a National Fraud Squad); tasking a national authority to co-ordinate public and private sector initiatives; establishing a centre to receive and analyse crime reports; and major improvements in the way courts handle fraud cases. The maximum bill for these measures runs to £27m a year. Savings of public expenditure are estimated at between £23m and £37m.
Ros Wright said that “given the known facts about the financial cost and human damage caused by fraud it is frankly ludicrous to argue that such monies could not be found”. The review’s figures prompt a number of questions about current Whitehall priorities, the panel argues. Since, for instance, it would cost only £14.5m a year to double the number of police officers in fraud squads why have quite so many cases gone uninvestigated? A National Fraud Squad would cost £2m.
Pick up the bill
The panel, which is supported by the Institute of Chartered Accountants, also draws attention to what Mrs Wright describes as “Whitehall’s obsession with getting the private sector to pick up the bill for fighting crime” [picked up in Professional Security’s report on the review, in the September 2006 issue (‘Private sector may have to pay more’)]. Mrs Wright added: “Business already pays tax; co-operation is one thing but law enforcement is, and must remain a state function. Of course we recognise that public money is a precious commodity but protecting the citizen is the basic purpose of government and cannot be transferred to other organisations”.
Which Way Now? can be downloaded:
