Recommendation 1

HM Government Response Pending

The government agrees with the Committee’s recommendation. and update the government financial reporting manual (FReM), the technical accounting guide that supports public bodies in the preparation of their financial statements, to include a requirement for public bodies to set out in their annual reports what they are doing to tackle fraud and error. However, the government disagrees with the publication of individual counter fraud financial targets on the basis it considers that bolder, more ambitious targets can be set and delivered internally, building on the positive action undertaken by departments to date (for example., £341.3 million in 2023-24 or £913.5 million when including one-off events unlikely to recur). The government will continue to publish overall performance against targets through the annual Cross-Government Fraud Landscape Report. A proposal will be presented to the Financial Reporting Advisory Board (FRAB), the independent advisory Board responsible for advising the Treasury on the form and content of accounts for their review ahead of the annual publication of the FReM in December, for implementation from 2027-28. The government agrees with the Committee’s recommendation. performance and wider counter fraud activities in their ARAs, however, this is not universal or standardised. The Treasury will work with the Public Sector Fraud Authority (PSFA) to agree a requirement for public bodies to set out the type of counter-fraud activity they are conducting and how they intend to improve future performance in their annual reports. A proposal will be presented to the Financial Reporting Advisory Board (FRAB), the independent advisory Board responsible for advising the Treasury on the form and content of accounts for their review, ahead of the annual publication of the FReM in December 2026, for implementation from 2027-28. The PSFA will also continue to work with departments and public bodies to track how they are managing fraud and error performance, as informed by the mandatory, quarterly Consolidated Data Review, which form the basis of the PSFA-led Cross-Government Fraud Landscape Reports.