Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Rejected
Government increases fraud measurement experts while acknowledging challenges separating fraud and error
Conclusion
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 because that would be too expensive and complicated.32 For example, DWP and HM Revenue & Customs (HMRC) spend £22 million each year on measuring fraud and error in the welfare and tax systems.33 PSFA told us that it will mainly focus its efforts on fraud risk assessments and outcomes from counter-fraud work to prevent and detect fraud.34 We asked PSFA about the conflation of fraud and error, and what plans, if any, it had to separate them as they are different concepts with different public perceptions. PSFA explained that differentiating between fraud and error requires an assessment of intent, which is not always practical to undertake in large scale fraud measurement exercises. It told us that when public bodies have “established vulnerabilities, the response that we may use would not look just at error or fraud” because both often require the same preventive approach.35 Professionalisation of government’s counter-fraud workforce
Government Response Summary
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 declining to publish information that could aid fraudsters.
Government Response
Rejected
HM Government
Rejected
The government disagrees with the Committee’s recommendation. The PSFA recognises the value in having a strategic picture of the highest risk areas. In its Mandate, the PSFA committed to the creation of the High-Risk Fraud Portfolio. As this is built, it will provide a common understanding, and strategic intelligence picture, of the highest risk areas that can be shared across government. The government will seek to be transparent. However, it will not publish any information that could increase the fraud threat by showing how attacks could be executed. The PSFA will not publish a separate strategic intelligence report. The PSFA will continue to publish annual Fraud Landscape Reports and bulletins. These outline the main risks and issues across government, including the levels of detected fraud (and corruption) and associated error in departments and public bodies (excluding tax and welfare, as these are published elsewhere). These levels are based on the best available evidence. The PSFA are working with departments to identify opportunities to improve the quality of data use in these estimates. Fraud Measurement exercises will continue as a tool to understand fraud and error loss levels in areas of high risk. The PSFA will continue encouraging, and supporting, departments to do more targeted measurement through assurance, training and updating standards, including learning from our international partners. Disaggregating between fraud and error requires determining intent which is cost intensive and may not be the most effective use of counter-fraud resources, so is left to the discretion of individual departments.