Commission finds £83m in public sector fraud

13 May 04
The Audit Commission has identified public sector fraud totalling £83m in one of the UK's biggest data-matching exercises.

14 May 2004

The Audit Commission has identified public sector fraud totalling £83m in one of the UK's biggest data-matching exercises.

The biennial exercise saw the level of fraud exposed soar by 66% from the amount identified in the 2001 round, when £50m was found. This increase is due largely to the massive expansion in the number of organisations taking part.

For the first time, all NHS bodies audited by the commission were included, following a pilot scheme run in 2001. As a result, the 2003 national fraud initiative, published on May 13, involved 1,150 public sector bodies, compared with 600 two years ago.

Fraud relating to housing benefit, pensions and council housing was exposed by cross-checking records held by local authorities, health service trusts, pensions agencies and some Whitehall ministries, such as the Department for Work and Pensions.

The main types identified included unfounded claims for housing and council tax benefit, payroll fraud where employees held multiple posts, and multiple council house tenancies.

The fastest-growing area of detected fraud related to public sector occupational pension schemes: the number of cases doubled to 2,076 in 2003 and totalled £5.7m. In some instances, relatives continued to collect payments after the pensioner had died, while in others retirees took up jobs in the same sector.

Commission chair James Strachan said the results showed how joined-up working between organisations could benefit the whole public sector.

'The Audit Commission is committed to exposing fraud in the public sector and protecting taxpayers' money. As the success of the national fraud initiative shows, the net is closing in on fraudsters and it is getting harder for them to hide in the system.'

As a result of the exercise, 365 successful prosecutions have been mounted and 121 public sector employees have been sacked or have resigned. But the commission said that not all organisations were being robust enough in using the information from the NFI to clamp down on fraud.

Peter Yetzes, associate director, IT audit, told Public Finance that the commission intended to 'target' those bodies that needed to do more, offering training in how to deploy anti-fraud resources most effectively. 'It's not a major problem, but we want to see this information being used to the full in all circumstances,' he added.


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