The Westminster government has launched strategies covering fraud and economic crime but has not yet established what outcomes it wants to achieve, according to the National Audit Office (NAO) in a report.
Gareth Davies, the head of the NAO, says: “Five years on from our last report on this subject, the Home Office has taken limited action to improve its response to fraud. Its approach has lacked clarity of purpose, it does not have the data it needs to understand the full scale of the problem, and it is not able to accurately measure the impact of its policies on this growing area of crime. For its planned Fraud Strategy to succeed, the Home Office must be vigorous in leading a cross-government response that is informed by a thorough understanding of what works in combatting fraud.”
For the full, 50-page report visit the NAO website.
The Home Office is responsible for preventing and reducing fraud. It does so with many bodies including the National Crime Agency (which hosts the National Economic Crime Centre), the City of London Police Force (the national lead force for fraud), other government departments, the finance, technology and telecoms sectors, and partners abroad. Most frauds in the UK are enabled through computer technology, including by criminals who can operate remotely anywhere, the NAO notes.
In a 2017 report Online fraud, the NAO concluded that fraud had been overlooked by the government, law enforcement, and industry, and demanded an urgent response.
Since then, the threat from fraud has increased and evolved but the number of fraud offences resulting in a charge or summons has fallen. Crime figures show that fraud was the largest category of crime in England and Wales in the year ending June 2022 – amounting to 41pc of all crimes against individuals, compared to 30pc in the year ending March 2017. While bank and credit card fraud are still the most common, other forms of fraud, such as advanced payment fraud, are increasing rapidly. The estimated number of incidents of actual and attempted fraud against individuals in England and Wales rose by 12pc from 3.4 million in the year ending March 2017, to 3.8 million in the year ending June 2022. However, the number of fraud offences resulting in a charge or summons fell from 6,402 in 2017 to 4,816 in 2022.
The NAO sees still significant gaps in the Home Office’s understanding of the threat from fraud. Based on 2015-16 data and in 2015-16 prices, the Home Office estimates that the cost of fraud to individuals is £4.7 billion – it does not have any reliable estimate of the cost of fraud to businesses. The Home Office also has a limited understanding of who commits fraud and those who enable it by their action or inaction.
Strategies have covered a range of topics including cyber security, anti-corruption, and serious and organised crime, making it challenging for the Home Office to focus and coordinate the activities of partners. The Home Office was solely or jointly responsible for five actions related to fraud in the 2019 Economic Crime Plan, but these were expressed as activities or aspirations, rather than outcomes. In April 2021, the Home Office announced plans for a Fraud Action Plan to set a national approach between 2022-2025. However, in March 2022 the Government instead announced plans for a new Fraud Strategy, building on the initial development of the Fraud Action Plan. The Fraud Strategy has not yet been published.
The Home Office has limited influence over many of the organisations required to successfully combat fraud. Addressing the threat of fraud depends on the Home Office building relationships with a wide range of partner bodies and influencing the behaviour of the public and businesses. Its relationships with partner bodies vary in maturity. There can also be tensions in what the Home Office is expecting partners to do, for example the steps it asks the private sector to adopt to prevent fraud can slow down the customer journey.
The Home Office does not understand the full extent or impact of resources dedicated to combatting fraud. In 2017, the NAO found that the Home Office needed to improve the way it measured its work on fraud. It still does not have a complete picture of what is being spent on tackling fraud by its partners in the public and private sector, or how effective this spending is. It has however made some improvements to its collation and monitoring of fraud data. The Home Office is in the relatively early stages of working more closely with international partners on fraud – it has a limited understanding of the international response, and how the UK’s response compares to other countries. Without a better understanding of the impact its policies are having, the Home Office will not be able to prioritise or adapt its approach.
Comment
At the Association of Police and Crime Commissioners (APCC), the National Lead on Fraud is Police and Crime Commissioner for Avon and Somerset, Mark Shelford. He spoke of ‘an urgent need for action to respond to fraud right now at a local level and this is where our role as PCCs comes in’. He pointed to ‘a wider problem in fraud where governance across the whole system is in need of revision. The question of who answers to who, and where responsibility sits, is confused.’
