Fraud and Error
We never really had to have Austerity at all. Says who? Experian, that’s who, in their Annual Fraud Indicator Report. What difference would £190 billion per annum have made to the UK’s budget?
The report says billions of pounds disappear from the UK every year because Fraud and Error. In fact, that’s what this major, and credible, piece of research says. £190 billion is a lot of money. Will our leaders investigate, demand investingation and sort it out? That’s what this blog is about.
It seems we have a crock of sh*t our government could turn into a crock of gold. Of course that nneds diligence and political will. What’s more, our government needs to get organized.
Times are hard and we hear government mantras like ‘value for money’.
Unsurprisingly, benefit fraud is in the crosshairs. Imagine, the latest figures indicate that £3.8 billion was overpaid to benefits claimants. It seems that slightly less than half of that figure is down to ‘error’. Around £2bn is the estimated fraudulent loss. Put another way, that adds up to just over 1% of the stolen money. What about the rest?
Hostile? You bet
It’s not surprising that, in 2018, it was reported that 4,045 DWP staff investigate ‘Fraud and Error’ aiming to recover £2 billion lost to benefits fraud. Of course, IT systems supporting controls like Universal Credit aim to ensure proper management, if a little painfully. The costs of operating the system had reached nearly £16 billion by 2015. At the same time, HMRC employs about 1,000 staff to get after the £2 billion lost to tax avoidance with a quarter of the resources.
It all adds up to around 5,000 people investigating £4 billion pounds of (probably) misappropriated revenue. Based on a mean £15K salary plus 75% overheads one might estimate around £130 million a year is spent by DWP and HMRC in pursuit of crooks.
Naturally enough, you may wonder, what else can we pursue? The short answer is ‘lots.’ With this in mind, Experian’s Annual Fraud Indicator Reports are worth a look.
Be Reassured, the Government Claims a Great Success
“Attempts at fraud will happen and government sees the identification of these problems as a great success. It is only through identifying and understanding fraud that we can take effective action against it. We have made good progress, since 2014/15, identified fraud in the public sector has risen from £29.7 million to £73.6million. This rise has been due to the hard work of public sector workers and the coordinated drive from the Cabinet Office.” Chris Skidmore (then Minister for the Constitution)
Minister Skidmore reported that his team had identified £74 million of fraud and this is due to hard work. In other words, only £39.9 billion to go …EVERY YEAR. You read it right, every year.
As the Minister says:
“This Government’s ambition is for the UK public sector to be one of the leading countries in both identifying and dealing with fraud loss and risk. The Cabinet Office is bringing government together to move on this agenda.”
In light of other facts in documents such as the AFI reports, could it be that our leaders lack interest or have a general unwillingness to pursue criminality? In other words, is this simply an attempt to spin-away a sustained failure to investigate public and private sector fraud and bring criminals to justice?
There’s More, Much, Much More
Above all, fraud and error of a much less publicised nature and altogether larger amount is overlooked … well nearly. It may come as a surprise to learn that, back in 2014, the UK Commons Public Accounts Committee accused our government of a deliberate cover up of fraud and incompetence.
The Government, itself, estimated in 2016 between £22 and £49 billion were lost annually due to fraud and error in the public sector. With this in mind, crowing about identifying £74 million of fraud and error, whilst an excellent result, is somewhat misleading in the scale fo things.
As mentioned previously, we have the UK Annual Fraud Indicator (AFI) 2017. It reports fraudulent activity costs the country £190 billion pounds a year. Imagine if we could recover even half of that …
Why does the Government Fraud Landscape Annual Review 2018 report much lower amounts of money. In spite of the Experian figures, one wonders why the 2018 AFI is already six months late, if it’s coming at all.
If the figures stack-up, hands up!
If £130 million a year is invested in recovering (or at least trying to recover) £4 billion of ill-gotten gains, then a similar effort to recover£181 billion makes sense. Imagine similar resources being applied. It’s worth remembering that even if we only recovered a third of the money, that would be £60+ billion.
One thing is clear, if the AFI figures are correct, up to ten times the annual reported losses or £1,900 billion has been lost to criminality and incompetence in the last 10 years.
Disgrace is an inadequate word
Here we are, in a wealthy country with food-banks where 30% of our children (4,1 million) live in relative poverty. My goodness, a significant portion of our future adult population may never be fed properly or develop to their full potential.
I’m deeply concerned … we must do something positive and in line with the facts. Dissembling, incompetence and misorganisation from Westminster muddies water and misleads us all.
© Mac Logan