Recommendation 25

Our recent report on fraud and error highlighted that the taxpayer is expected to lose billions of pounds from the increased risk of fraud and error in the government’s COVID-19 schemes. It found that the cost of fraud and error within the tax and benefits system is fairly well understood by government, and HMRC and DWP have well- established approach to tackle and address fraud and error in their areas. But for many areas of spend outside the tax and benefits system there is still no formal measurement and limited capability to tackle fraud and error, risking large amounts of fraud and error being unidentified or untackled.53 We therefore asked HM Treasury what it was doing to ensure that Departments pay greater attention to identifying and addressing fraud and error and complied fully with requirements set out in Managing Public Money. HM Treasury and 50 Qq 4–6 51 C&AG’s Report, paras 5–11; Committee of Public Accounts, COVID-19: Support for children’s education, Committee of Public Accounts, COVID-19: Bounce Back Loan Scheme, HC 687, Session 2019–21, 16 December 2020, para 1; C&AG’s Report, para 6 52 Qq 21, 41; C&AG’s Report, paras 7–8 53 Committee of Public Accounts, Fraud and Error, HC 253, Session 2021–22, 30 June 2021 Initial lessons from the government’s response to the COVID-19 pandemic 19 the Cabinet Office explained that, as well as departments with established counter-fraud capabilities, such as the Department for Work & Pensions and HM Revenue & Customs, other departments such as the Department for Business, Energy & Industrial Strategy, the Department for Digital, Culture, Media & Sport and the Department for Environment, Food & Rural Affairs had to deal with increased fraud risks. It told us that government was supporting those departments with additional resource and capability, strengthening the counter-fraud and finance functions, and reminding accounting officers of their responsibilities with regard to fraud and error.54