Recommendations & Conclusions
25 items
2
Recommendation
Sixty-Ninth Report - Tackling fraud and…
Rejected
There are large gaps in government’s understanding of the extent and location of fraud and corruption risks. Most departments are exposed to several types of fraud and corruption risk in their income and spending, but few produce regular, reliable, and comprehensive estimates of the level of fraud and corruption of …
Government response. The government rejects the recommendation to publish a separate annual strategic intelligence report, stating the PSFA's High-Risk Fraud Portfolio will provide a strategic picture, and that disaggregating fraud and error is cost-intensive.
HM Treasury
3
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Departmental counter-fraud staff often lack the credibility and authority needed to exert influence at senior levels. Historically, counter-fraud experts have focused on investigating suspected fraud and have not been brought into wider policy making and design. Many departments lack senior counter-fraud professionals with influence in their organisations and counter-fraud staff …
Government response. The government agrees and is implementing the recommendation. The PSFA will update on its Workforce and Performance Review, review compliance, launch a risk and prevention service, double specialists, launch a fraud leadership qualification, and coordinate reviews of department resourcing and …
HM Treasury
4
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Government has often failed to implement basic counter-fraud measures into its new initiatives. Government’s COVID-19 response highlighted the importance of designing counter-fraud measures, including controls, reporting and recovery, into new initiatives at an early stage of the policy cycle. Government could have maintained several basic standards of public accountability, even …
Government response. The government agrees and is implementing. The PSFA offers support and training for embedding Initial Fraud Impact Assessments (IFIAs). HM Treasury will update Accounting Officer Assessment guidance to reference the PSFA and advise AOs-in-training to use IFIA outcomes and explicitly …
HM Treasury
5
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Government is not generating enough of a deterrence effect from pursuing those that commit fraud against the public purse. Most of government’s investigatory and enforcement capability sits in HM Revenue & Customs and DWP. PSFA will in due course set up a central enforcement unit. Some departments have the choice …
Government response. The government agrees. The PSFA is working with Cabinet Office Communications and has established a Cross Government Counter Fraud Communications Working Group. This group will develop a cross-government communications plan to highlight anti-fraud efforts and create a deterrence effect.
HM Treasury
6
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
It is very unlikely that most of the losses due to fraud and corruption will ever be recovered. While fraud detection levels are rising, a large gap still remains between the estimated underlying levels of fraud and amounts detected. In 2020–21, while PSFA estimated fraud and error losses between £3.5 …
Government response. The government agrees and is implementing, stating a clear policy to find, report, and recover fraud. HM Treasury will continue to invest in recovery initiatives, considering returns case-by-case, and will work with the PSFA to hold departments accountable for financial …
HM Treasury
7
Recommendation
Sixty-Ninth Report - Tackling fraud and…
Accepted
Central government often relies on local government to manage fraud risks on its behalf but does little to support local authorities’ capability to do so. For example, the Department for Business, Energy and Industrial Strategy required local authorities to pursue any losses from error and fraud they identify arising from …
Government response. The government agrees but states the PSFA's mandate is primarily with ministerial departments. It highlights existing support for local government through sharing standards, the Counter Fraud Profession, providing expert advice on specific schemes, and the National Fraud Initiative.
HM Treasury
1
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury, Cabinet Office and the Public Sector Fraud Authority (PSFA) about tackling fraud and corruption against government.2
Government response. The government acknowledges fraud as a national security threat and highlights the PSFA's establishment with new funding, exceeding its initial savings target. It also cites DWP and HMRC's efforts and the encouragement for departments to set financial impact targets to …
HM Treasury
8
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
We were interested to hear about how government was demonstrating leadership at the most senior levels on tackling fraud and corruption. HM Treasury explained the steps it is taking to change and embed the counter-fraud culture across the public sector. It has asked every major department to target a return …
Government response. The government agrees with the recommendation and notes it is already implemented, detailing significant existing investments in counter-fraud, such as PSFA funding and DWP/HMRC recovery targets. It also reiterates encouraging all departments to set financial impact targets for their counter-fraud …
HM Treasury
9
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Rejected
Most departments are exposed to more than one type of fraud risk, while all have exposure to internal fraud and corruption risk.22 However, few departments produce regular, reliable, and comprehensive measurements on the level of fraud and corruption in major areas of their spending.23 PSFA estimates that, for the two-thirds …
Government response. The government disagrees, stating that while PSFA is creating a High-Risk Fraud Portfolio and will continue publishing annual Fraud Landscape Reports and conducting fraud measurement exercises, it will not publish a separate strategic intelligence report. Disaggregating fraud and error is …
HM Treasury
10
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Rejected
Each FMA exercise covers a specific area of spend and estimates the level of fraud and error in that spending. Since 2014, the FMA programme comprised 62 assessments covering £224 billion of spending. The GCFF’s Oversight Board concluded that 32 of the assessments, representing more than half (57%) of assessed …
Government response. The government explicitly rejects the implied recommendation, stating it will not publish a separate strategic intelligence report or information that could increase fraud threats. Instead, the PSFA will create a "High-Risk Fraud Portfolio" and continue to publish annual Fraud Landscape …
HM Treasury
11
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Rejected
HM Treasury told us that to improve government’s fraud measurement capability, the number of fraud measurement experts will be doubling from 99 to about 180 across government.31 PSFA told us that it would not advocate departments to conduct fraud measurement exercises in all the areas where there are currently gaps …
Government response. The government explicitly rejects the implied recommendation to separate fraud and error due to cost and practicality, stating it is left to departmental discretion. It reasserts its focus on a "High-Risk Fraud Portfolio" and continued publication of annual reports, while …
HM Treasury
12
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
In 2018, Cabinet Office established the GCFF, which in turn launched a set of Counter Fraud Functional Standards to set out minimum expectations for how government organisations should manage their fraud and corruption risks. In October 2018, government also launched the GCFP to support the development of capability for counter- …
Government response. The government agrees and details several actions, including prioritising support based on fraud understanding, launching a Risk, Threat and Prevention Service, developing a fraud leadership qualification, and strengthening the process for reviewing compliance against Counter Fraud Functional Standards.
HM Treasury
13
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
However, PSFA recognised that there is further work to be done on developing the counter-fraud profession. There are over 13,000 members of the counter-fraud function across government, around 84% of whom work for DWP or HMRC. Less than 45% of counter-fraud practitioners are members of the GCFP.38 HM Treasury told …
Government response. The government accepts the recommendation for further professionalisation, committing to actions such as doubling the number of counter-fraud specialists, launching the world’s first fraud leadership qualification, and providing further standards and training. It will also coordinate reviews of department resourcing …
HM Treasury
14
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
In 2021, HM Treasury commissioned GCFF to undertake a Workforce and Performance Review (WPR) to map the counter-fraud resources and delivery outcomes of 70 central government organisations.42 HM Treasury and Cabinet Office said that the WPR exercise will now be an annual undertaking to enable government to focus on areas, …
Government response. The government agrees and commits that the PSFA will update the committee in 12 months on the outcome of the next Workforce and Performance Review, confirming it will be an annual undertaking.
HM Treasury
15
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Government’s response to the COVID-19 pandemic underlined the need to design counter-fraud measures, including controls, reporting and recovery, into new initiatives at an early stage of the policy cycle. Government could have maintained several basic standards of public accountability to minimise opportunities for fraud and corruption. It could have: increased …
Government response. The government accepts the recommendation and confirms Initial Fraud Impact Assessments (IFIAs) are embedded in HMT's approval processes with required training for officials. It further commits to using spending conditions to enforce fraud risk management expectations and requiring Accounting Officers …
HM Treasury
16
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
PSFA also informed us that it would soon launch its ‘risk, threat and prevention service’, which it wants to provide departments with further support on early risk assessments.50 The Cabinet Office made an announcement on 24 May, shortly after our evidence session, confirming the launch of this new team and …
Government response. The government accepts the importance of early risk assessment and confirms the PSFA has launched its Risk, Threat and Prevention Service. It also commits to doubling counter-fraud specialists, launching a fraud leadership qualification, providing further training, and strengthening compliance reviews …
HM Treasury
17
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Detecting and pursuing fraudsters and corrupt officials is important for the provision of justice, to provide intelligence on the types of fraud and corruption occurring and to act as a deterrent for others.54 Cabinet Office told us it is the intention of government to step up its enforcement activities, and …
Government response. The government accepts the importance of deterrence through transparency and communication, establishing a Cross Government Counter Fraud Communications Working Group to develop a common narrative and amplify successful counter-fraud activities by June 2024. The PSFA will also publicly report on …
HM Treasury
18
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
On the deterrence effect of convictions and whether there is a sufficient level of convictions to create a suitable deterrent, the PSFA told us that it was not aware of any evidence to indicate what the right level of prosecutions would be to create a deterrent.56 After our evidence session, …
Government response. The government agrees that transparency and clear communications are a priority, committing to establish a Cross Government Counter Fraud Communications Working Group to develop a plan, amplify successes, and promote the deterrence effect by June 2024.
HM Treasury
19
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
DWP and HMRC are the two departments at the front line of the battle against fraud. These departments have their own fraud investigation and enforcement legal powers.60 Cabinet Office told us that the PSFA will itself be setting up an enforcement unit to meet the demand across government for effective …
Government response. The government accepts the importance of transparency, establishing a Cross Government Counter Fraud Communications Working Group led by the PSFA to develop a consistent communications plan by June 2024. The PSFA will also continue public reporting through strategic plans and …
HM Treasury
20
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Rejected
Departments have detected an increasing amount of fraud and error outside of tax and welfare expenditure. Cabinet Office has reported that since 2014–15 departments have detected £0.9 billion of fraud.65 It is not, however, possible to tell whether the increase in detected fraud relates to better detection or increased occurrences …
Government response. The government disagrees, stating that while PSFA is developing a High-Risk Fraud Portfolio and will continue publishing annual Fraud Landscape Reports and conducting fraud measurement exercises, it will not publish a separate strategic intelligence report. Disaggregating fraud and error is …
HM Treasury
21
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Departments also only recover a minority of the fraud they detect. In 2020–21, departments had recovered £29 million out of the £243 million of detected fraud. Enforcement and recovery powers are also fragmented across government, which exacerbates the challenge government faces to recover fraud losses.69 We asked HM Treasury how …
Government response. The government commits to continue investing in fraud recovery initiatives and pursuing legislative options to strengthen the public sector's counter-fraud response. It will also work with the PSFA to hold departments accountable for financial targets on counter-fraud investment, building on …
HM Treasury
22
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
The accountability system between local and central government is complex. This complexity means it can be difficult to identify who is accountable for what.71 Central government often relies on local government to manage fraud risks on its behalf, for example, on grants administered to individuals and businesses. An organisation’s exposure …
Government response. The government states that responsibility for local government fraud lies with council CFOs, while DLUHC is responsible for the wider accountability framework and has published new guidance. PSFA already supports local government through sharing practices, providing standards, and running the …
HM Treasury
23
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Between March 2020 and March 2022, local authorities distributed COVID-19 grants costing £22.6 billion via 4.5 million payments to businesses. By October 2022, the Department for Business, Energy & Industrial Strategy (BEIS) estimated that error and fraud across all the COVID-19 grant schemes was in the region of £1.1 billion …
Government response. The government states that local council Chief Financial Officers are responsible for tackling fraud, while DLUHC accepts responsibility for the wider accountability framework and has published new guidance. The PSFA already shares practices, makes standards available, and runs the National …
HM Treasury
24
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
HM Treasury told us that while it may appear reasonable to extend the PSFA’s remit to also cover local government, there are different governance architectures across central and local government, and any change to the roles and responsibilities of the PSFA would entail “a very large increase” in the mandate …
Government response. The government states that responsibility for local government fraud lies with council CFOs, while DLUHC is responsible for the wider accountability framework and has published new guidance. PSFA already supports local government through sharing practices, providing standards, and running the …
HM Treasury
25
Conclusion
Sixty-Ninth Report - Tackling fraud and…
Accepted
Cabinet Office and the PSFA told us that while local government does not explicitly fall under their remit, they still provide support to local authorities through various means. Local authorities can make use of the data-matching functionality of the National Fraud Initiative. Local authorities have access to the resources of …
Government response. The government states that responsibility for local government fraud lies with council CFOs, while DLUHC is responsible for the wider accountability framework and has published new guidance. PSFA already supports local government through sharing practices, providing standards, and running the …
HM Treasury