Recommendation 15

The National Fraud initiative (NFI) is a tool created in 1996 that brings data together from across the public sector to help bodies look for fraud and, to a lesser extent, for error. The NFI was originally focused on local authorities, who are required to use it. But the PSFA told us it is now increasingly used by central government bodies as well.39 Thirty-six central government bodies (including arm’s-length bodies) took part in the most recent NFI exercise in 2024–25, an increase from 22 bodies in the previous iteration.40 The PSFA told us that there is more that could be done with the NFI and there are parts of it that it would encourage greater use of.41 It explained to us that central government bodies are not mandated to use the NFI because the original legislation was targeted at local government and has not since been amended.42 The Treasury told us that there may be an option to mandate central government bodies to feed data into the NFI even if they were not going to use it themselves. However, it also said that government has chosen not to mandate central government bodies to participate, as not all would have useful data.43 In written evidence provided after the session, the PSFA provided a preliminary estimate that making 35 C&AG’s Report, para 2.5 36 C&AG’s report, para 2.19 37 Qq 36-37 and 57 38 Q 82 39 Qq 48-49 40 C&AG’s Report, Figure 5 41 Q 48 42 Q 52 43 Q 53 14 the NFI mandatory for central government departments, and amending legislation to allow more data matching activities, could realistically save between £120 million and £150 million per two-year National Fraud Initiative cycle. Even under the PSFA’s most conservative modelling, it still projected a net uplift of approximately £60 million per two-year cycle.44