By Mark Smulian | 20 August 2013
Better fraud and error prevention has saved the government £6.5bn since the 2010 general election, Cabinet Office minister Francis Maude has said.
He said this reflected work in 2012/13 by Whitehall’s cross-departmental Fraud, Error and Debt Taskforce.
The report Tackling fraud and error in government: a report of the fraud, error and debt taskforce, published today, said that the National Fraud Authority estimated that fraud costs the public sector around £21.2bn a year, the majority of it against the tax and benefits systems.
But the government also lost significant sums to other areas, such as procurement, grant and payroll scams. These other fraud types accounted for annual losses of around £4.7bn, £2.6bn of which occurred in central government.
It said the Department for Work and Pensions and Revenue & Customs had estimated that £3.6bn was lost in benefit and tax credit errors and £6m in tax errors.
HMRC generated £6bn of the additional savings through tax compliance, with more than 5,000 staff redeployed into new compliance roles.
Among departments experimenting with new approaches to combating fraud and error, the Department for Business Innovation and Skills saved £13m through revised checks on student loan applications, and the Ministry of Defence saved £11m by reclaiming duplicate or overpayments to suppliers of services and goods.
Maude said: ‘Every government promises a crackdown on fraud and error but we are delivering – £6.5bn saved last year alone.
‘But there are still too many cracks for fraudsters to slip through. Our priority is to enable different parts of government to share data about fraudsters and work as one to catch them.’
Welfare reform minister Lord Freud said the introduction of Universal Credit would make frauds harder to commit undetected and expected to reduce benefit fraud by £200m a year.
