Conclusion 5

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 of referring a fraud they detect for prosecution or applying a civil penalty, normally with a lower burden of proof and lower fine. The latter can offer a more cost-effective route to investigate fraud and recover funds, but may not offer the same deterrent effect. Government has not set out the level of prosecutions and convictions for fraud that it wants to achieve in order to produce an effective preventive deterrent. Departments are also not yet able to demonstrate that they have the right balance between civil and criminal sanctions to achieve both the optimal recovery of funds and a deterrent effect. Government can do more to increase transparency on the extent of prosecutions to highlight the consequences of committing fraud, deter people from committing fraudulent activities, and reassure the public that fraud and corruption does not go unpunished. Recommendation 5: The Public Sector Fraud Authority, in collaboration with other departments, should develop a cross-government communication strategy for highlighting government’s efforts in pursuing fraudsters and the effectiveness of counter-fraud measures. It should, in the Treasury Minute, confirm it will oversee the implementation of this strategy.