No. ‘Fraud and Error’ …
What if we could pay for the NHS and cover the cost of the Ministry of Defence by stopping ‘fraud and error’ … and without austerity?
As a matter of fact, there’s a crock of sh*t our government could turn into a crock of gold, with a little diligence and political will.
You see, there’s £190 billion of money disappearing every year due to fraud and error.
Never mind austerity, the good news is we’re awash with fraudulent based recovery opportunities if we care to go after them. And that’s what this blog is about.
Of course times are hard. With this in mind we hear government mantras like ‘value for money’ combine with exhortations to ensure the wise use of resources.
As a matter of fact, benefit fraud is in the crosshairs.Imagine, the latest figures indicate that £3.8 billion was overpaid to benefits claimants. Although this is true, slightly less than half of that figure is down to ‘error’. In this case around £2bn is the estimated fraudulent loss.
Hostile? You bet
In these times of ‘Hostile Environments’ 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. At the same time, HMRC employs about 1,000 staff to get after the £2 billion lost to tax avoidance, or we might say, 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 the bad-guys.
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 is 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 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
To put it differently, 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, seems small beer.
As mentioned previously, we have the 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 the effort on the AIF estimate of £181 billion should equate to £1.3 billion a year to counter Public Sector fraud (and error). Imagine similar resources, £5.2 billion, aimed at investigating the Private Sector. It’s worth remembering that even if we only recovered a third of the money, that would be £60+ billion.
One thing is clear. Assuming the AIF figures are correct, up to ten times the reported losses or £1,900 billion has been lost to criminality and incompetence since 2008 and, most likely, for decades before that.
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. It’s important to realize that a significant portion of our future adult population may never be nourished properly or develop brains and physiques they have the potential for?
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