UK Government did not have a good understanding of fraud before the covid pandemic; and since the pandemic, the government has recorded a higher level of fraud. That’s among the findings of a National Audit office report into fraud and corruption against government.
Gareth Davies, head of the NAO, said: “There has been a substantial increase in the level of fraud reported in the annual reports and accounts we audit. In addition to the loss of taxpayer money, it creates the risk that people come to perceive fraud and corruption across government as normal and tolerated. If not tackled, this could affect public confidence in the integrity of public services.
“Government has more to do to understand the scale of the problem it faces and cannot yet demonstrate that it is tackling fraud effectively. The creation of the Public Sector Fraud Authority creates a real opportunity to address this.”
As for the numbers, the NAO notes that their figures likely understate the scale of the problem because they exclude any amounts that are too small to be reported in the context of any one set of accounts and no estimate was made of the level of fraud in the Department for Health and Social Care’s spend on the pandemic. PSFA is unable to be more accurate with its estimate due to the inherent uncertainty over the extent of fraud and error, the NAO adds. It conducted its fieldwork between September 2022 and March 2023.
Most of UK Government’s counter-fraud capability sits within the Department for Work & Pensions (DWP) and HM Revenue & Customs (HMRC), where the largest known risks exist. However, outside of tax and welfare, most departments have little counter fraud capability and cannot demonstrate that this is proportionate to the level of fraud they face, the NAO found.
Government’s vulnerability to fraud increased due to its response to the pandemic. The NAO found that public bodies could have better managed the fraud risk without impairing their emergency response. These include faster transparency, better management of conflicts of interest, addressing known vulnerabilities more quickly, and timely financial reporting.
You can download the 75-page report at https://www.nao.org.uk/reports/tackling-fraud-and-corruption-against-government/.
Comment
Jon Radford, Head of Intelligence, Investigations and Data Services at the Insurance Fraud Bureau (IFB), an insurance industry body, said: “It’s of great concern to learn that the cost of fraud lost to the public sector has increased nearly four-fold to £21 billion in just two years following the pandemic. There is a danger that if the act of fraud is seen as a low priority for the authorities to tackle, this could result in more economic crime impacting the private sector.
“Sadly, we are seeing more people and businesses turn to fraud because of the long-lasting economic impact of covid and the cost-of-living crisis. Insurance scams cost everyone and put innocent people at risk, which is why we cannot tolerate fraud becoming socially acceptable.”
The IFB recently released Forward Together, its strategy for 2023-25.
