Recommendation 2

Government’s focus on the long-standing fraud and error risks it understands, risks large amounts of fraud and error being unidentified or untackled elsewhere. Efforts to tackle fraud and error in the tax and benefits system come under regular scrutiny. While we regularly scrutinise and challenge HMRC and DWP on their approach, both departments have a well-established approach. However, fraud and error threaten many other areas of the public purse with fraud and error going unmeasured in around £503 billion of expenditure each year. Cabinet Office estimates that the rest of government was already losing between £2.5 billion and £25 billion a year as a result of fraud and error before the COVID-19 schemes were introduced. Part of the challenge government faces is the sheer diversity of risks, with fraud and error impacting everything from grants and procurement to income collection. As part of its Global Fraud Risk Assessment, the Cabinet Office Counter Fraud Function identified a large number of COVID-19 schemes as potentially at high risk of fraud but believes scheme owners need to do more work to fully quantify those risks. The Function recognises that it needs to do more work to understand the broader fraud and error picture outside the remit of DWP and HMRC. 6 Fraud and Error Recommendation: HM Treasury and Cabinet Office should, within six months, work with all Departments to build on the existing Global Fraud Risk Assessment and identify and publish all the fraud and error risks to public money across government and commit to updating this publication annually.