Fraud and error during the COVID-19 crisis will cost the UK Government in the region of £4.6 billion, a think-tank estimates.
The UK Government response to COVID-19 is particularly vulnerable to fraud, owing to the novelty of new measures, the size of the relief packages, and the speed they have been brought in. Use of digital channels and third parties raises the opportunities for fraudsters to infiltrate the system. As for who is doing the fraud, it ranges, from the public to public sector workers, corporations and organised crime, says Policy Exchange. The lower bound for the cost of fraud in this crisis is £1.3 billion and the upper bound is £7.9 billion, in light of total projected expenditure of £154.3 billion by the Government.
Benefit fraud has already been a long-standing issue, the think-tank’s report notes. The Coronavirus Job Retention Scheme is the most expensive and widely used support scheme and is also the most susceptible to fraud. Although HMRC have attempted to directly tackle fraud in this area, it is one of the most difficult schemes to monitor and HMRC had already received 1,868 claims of furlough fraud as of the end of May.
The authors call for awareness campaigns to alert the public sector to the possibility and risks of fraud and to enlist the assistance of the public; and a ‘Minister for Fraud and Economic Crime’, ‘to oversee the prevention, detection, investigation and prosecution of all COVID-19 related economic crimes’, who should appoint a single law enforcement lead at the National Economic Crime Centre (NECC). Action Fraud, and the City of London Police’s related National Financial Intelligence Bureau (NFIB) could be merged with the NECC at the National Crime Agency (NCA), it’s suggested.
The three authors include Richard Walton, a retired former Met Police Commander.
The report advocates a single ‘Fraud Hotline’ for the public to report any aspect of fraud. (Although ever since Covid-19 lockdown in mid-March, the UK police official reporting line Action Fraud has been providing only a ‘reduced service’ through its contact centre.)
Unless the UK Government makes use of the latest anti-fraud technologies such as data analytics, it is unlikely that it will be able to investigate fraud at the level and scale that the crisis requires, the authors argue. They add that the crisis has exposed ‘long-term limitations to the public sector’s digital anti-fraud infrastructure’, singling out identity assurance and digital identity, for example to combat fraudsters impersonating government departments and agencies. As all that suggests, Government shortcomings against fraud pre-date the coronavirus; for instance the report calls for ‘common data standards across government for reporting of COVID-19 related fraud’.
As for the National Health Service in particular, the think-tank suggests that the central body the NHSCFA (Counter Fraud Authority) reviews frauds against the NHS during the COVID-19 crisis at the earliest opportunity, ‘to capture organisational learning’.
To download the 78-page document visit the Policy Exchange website.
