By Lucy Phillips
27 April 2010
The government has come under fire from a senior Labour politician for failing to tackle public sector fraud, which is costing taxpayers £38bn a year, according to experts.
A report published on April 26 by accountancy firm MacIntyre Hudson and Portsmouth University’s Centre for Counter Fraud Studies puts £22bn of the losses down to errors and fraud across local and central government. A further £16bn was a result of uncollected taxes. The £38bn total was more than double previous official estimates.
Former welfare reform minister Frank Field, who is Labour candidate for Birkenhead, told Public Finance that there was ‘a conspiracy to talk this down’ among ministers. ‘There has been a real reluctance to admit that people will rip anyone off, including public services,’ he added.
Field said all parties were ‘missing the trick’ by not setting out how they would recoup the losses to help pay off the country’s £164bn public deficit. ‘I think the most important thing for the new government, whoever it is, should be to put in place an effective counter fraud strategy across the public sector so we eliminate fraud first, before we start cutting public services. It would be hugely popular with the voters,’ he said.
Field added: ‘There’s going to be cuts anyway because the deficit is so serious, but people would go into the politics of cuts in better heart if they thought the government ensured their taxes were not being ripped off as the number one priority.’
The report recommended establishing a Public Sector Counter Fraud Agency to tackle the problem. It also called for the introduction of a legal duty for public sector bodies to measure and publish the extent of their losses through fraud each year, as happens in the US. Such measures could reduce the cost of fraud to the public by up to 30% – £22bn over the three years up to 2013/14.
Field backed both moves and also suggested strengthening the Freedom of Information Act to allow MPs to expose cases in their constituencies.
Jim Gee, director of counter fraud services at MacIntyre Hudson and one of the report’s authors, added: ‘Introducing measures to counter fraud is the least painful way to tackle the incredible budget deficit we’re facing, and reduces the extent of cuts needed to public services and jobs.’
27 April 2010
The government has come under fire from a senior Labour politician for failing to tackle public sector fraud, which is costing taxpayers £38bn a year, according to experts.
A report published on April 26 by accountancy firm MacIntyre Hudson and Portsmouth University’s Centre for Counter Fraud Studies puts £22bn of the losses down to errors and fraud across local and central government. A further £16bn was a result of uncollected taxes. The £38bn total was more than double previous official estimates.
Former welfare reform minister Frank Field, who is Labour candidate for Birkenhead, told Public Finance that there was ‘a conspiracy to talk this down’ among ministers. ‘There has been a real reluctance to admit that people will rip anyone off, including public services,’ he added.
Field said all parties were ‘missing the trick’ by not setting out how they would recoup the losses to help pay off the country’s £164bn public deficit. ‘I think the most important thing for the new government, whoever it is, should be to put in place an effective counter fraud strategy across the public sector so we eliminate fraud first, before we start cutting public services. It would be hugely popular with the voters,’ he said.
Field added: ‘There’s going to be cuts anyway because the deficit is so serious, but people would go into the politics of cuts in better heart if they thought the government ensured their taxes were not being ripped off as the number one priority.’
The report recommended establishing a Public Sector Counter Fraud Agency to tackle the problem. It also called for the introduction of a legal duty for public sector bodies to measure and publish the extent of their losses through fraud each year, as happens in the US. Such measures could reduce the cost of fraud to the public by up to 30% – £22bn over the three years up to 2013/14.
Field backed both moves and also suggested strengthening the Freedom of Information Act to allow MPs to expose cases in their constituencies.
Jim Gee, director of counter fraud services at MacIntyre Hudson and one of the report’s authors, added: ‘Introducing measures to counter fraud is the least painful way to tackle the incredible budget deficit we’re facing, and reduces the extent of cuts needed to public services and jobs.’
