Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
Strengthen counter-fraud controls for accelerated funding and share learning across Ministry programmes.
Conclusion
MHCLG’s previous attempts to speed up remediation exposed the taxpayer to increased risk of fraud. When MHCLG launched its high–rise Building Safety Fund in 2020 it relaxed a range of taxpayer protections in order get money out to projects quickly. While this approach has since been reversed, a potential loss of over £500,000 has been identified due to suspected fraud involving funds paid out in advance. MHCLG says 7 that counter–fraud activity was underway before a belated Fraud Risk Assessment was completed in 2023. We are concerned that poor record keeping resulted in documentation being lost. Lessons are being learned, and the Cladding Safety Scheme is on a sounder footing, including counter– fraud controls. As MHCLG prepares to accelerate remediation work, we are encouraged that it is engaging with the Public Sector Fraud Authority and taking forward work to undertake a measurement exercise to learn more about the extent of potential fraud and the effectiveness of its controls. recommendation MHCLG should, by the end of 2025: use findings from fraud measurement exercises to strengthen its counter–fraud controls and ensure they are adequate to meet accelerated funding demand; and share relevant learning across the Ministry to help prevent fraud in other programmes.
Government Response Summary
The government agrees and will use initial findings from fraud measurement exercises to strengthen counter-fraud controls and share learning across the Ministry and with the PSFA. Full outputs for the fraud loss measurement exercise are expected by Autumn 2026.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. end of 2025. The government has worked extensively to ensure that the action taken for the NAO recommendation is both efficient and effective. The government reviewed the Public Sector Fraud Authority’s recommended approach for fraud loss measurement which is a highly technical process. The public sector standard to effectively complete this exercise is 18 months in length, therefore full outputs will not be available until Autumn 2026. The response and approach has been agreed with the NAO and has been indicated in the six-monthly update to the PSFA. The government will use initial findings and continued engagement with PSFA and NAO to drive continual improvement to counter fraud controls. The government will share learning across the Ministry and with the PSFA to help prevent fraud in other programmes.