- with readers working within the Securities & Investment industries
The government has produced statistics and argued it is turning the tide against public sector fraud. Niall Hearty of Rahman Ravelli looks at the figures and the bigger picture.
The government is keen to let it be known that it is now better than ever at stopping public money making its way to fraudsters.
The evidence for this is a collection of statistics that indicate how more efficient efforts have become to tackle public sector fraud. The most striking of these is that more than £480 million was prevented from ending up in the hands of fraudsters in the 12 months to April this year – the highest such figure ever recorded.
The figures have been accompanied by official comments, including "new technology and artificial intelligence turns the tide in the fight against public sector fraud ' and references to preventing any repeat of Covid loan fraud.
Of the £480 million saved, £186 million was the result of identifying and recovering fraud committed during the Covid-19 pandemic. The government appears to be very proud of its efforts to prevent hundreds of thousands of companies with outstanding (and potentially fraudulent) Bounce Back Loans from dissolving before they had to pay any of it back. Millions have been "clawed back' from companies who took out Covid loans they were not entitled to, with the government also announcing its successful "clamping down' on people unlawfully claiming single persons council tax discount and its identifying of more than £68 million of wrongful public sector pension payments.
Aggressive
The idea being conveyed is one of an aggressive government that is on the front foot when it comes to tackling fraud in the public sector. Which is why Cabinet Office Minister Josh Simons announced the figures with talk of this being the government that "has delivered the toughest ever crackdown on fraud' and is "one step ahead of fraudsters'.
It is unlikely that fraudsters pay much attention to government announcements. But any that saw that last phrase would surely have a little laugh to themselves. Those committing fraud are successful if they spot the chance for carrying it out (and do so) before those they target realise the need to prevent it. It is a poacher and gamekeeper scenario: the fraudster is always looking for opportunities that have not been recognised by those they are looking to deprive of their assets.
So the idea that the government is one step ahead of them is, at best, wishful thinking. It has regained some money that it may otherwise have lost for good and has held some people to account for that. But that is, at best, catching up rather than staying one step ahead.
Perspective
If that feels like a downbeat assessment of the government's announcement of its public sector fraud achievements and the figures it is citing, there are other statistics that put things into perspective. Just four months ago, the government itself quoted figures from the Public Sector Fraud Authority. These estimated that the level of fraud and error when it came to public sector payments in 2021-22 was between £39.8 billion and £58.5 billion. Recovering £480 million in a year cannot be said to be a particularly tough crackdown on fraud.
In fairness, the government believes its use of AI and other new technology will bring further results. Employing AI to scan new policies and procedures for weaknesses before they can be exploited could, if utilised appropriately, be an effective way of preventing the fraudster taking advantage of an opportunity before anyone else sees it. The government has gone as far as to say that this could help prevent millions in potential losses and cut the time taken to identify fraud risks by 80%.
This could prove to be a huge positive for the public purse, and it is a sign that the government is intent on regaining what has been lost to fraud. But, for now at least, it may be best for the government to concentrate on these efforts rather than continue to cite statistics about current and hoped-for achievements, which make it sound like it lost a pound but found a penny.
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