21st March, 2012
Source: #TheFraudTube, 21st March 2012
Today Chancellor George Osborne delivered his 2012 budget. Public sector fraud and error costs the UK economy around £21b annually and so there is an incentive to reduce this figure to help reduce the current deficit. Key points from the budget from a counter fraud perspective are as follows:
- 2.137 Alcohol fraud – The Government will consult on alcohol anti-fraud measures, including the introduction of fiscal marks for beer, supply chain legislation, and a licensing scheme for wholesale alcohol dealers.
- 2.190 VAT: tackling fraud on imported road vehicles – As announced at Budget 2011, the new system to tackle VAT evasion on road vehicles brought into the UK will be introduced from 15 April 2013. Vehicles will have to be notified to HMRC before registration with the Driver and Vehicle Licensing Agency and a new online system will be available to facilitate this. (Finance Bill 2012)
- 2.23 DWP fraud and error programme – The Government will provide up to £325 million additional funding for DWP to implement its strategy for tackling fraud and error in the benefit system. Through this strategy, the Government plans to reduce annual fraud and error overpayments in benefits and tax credits by £1.4 billion by 2015
(The budget in full can be found below)
So in short the government is throwing £325m at the Department of Work and Pensions to tackle a £21b problem with a target of £1.4b fraud reduction by 2015. Putting this into perspective £325b is around 1.55% of current annual losses due to fraud and error and so the aim is to reduce the overall loss by around 6.67% over 3 years (or by approximately 2.5% per year).
This target sounds a bit modest in our opinion and, if spent correctly, £325m ought to be able to achieve substantially more than £1.4b in savings via reduced fraud and error. The typical ROI (return on investment) for fraud controls implemented in many private sector businesses is (proportionally) far high than this.
On 24th May GovNet will be hosting the inaugural Fraud and Error conference, which will bring together over 350 delegates, 20 high level speakers and 20 service providers to discuss and understand the key challenges facing the public sector. Fraud Consulting #TheFraudTube will be participating at this event so why not come and meet us? With our extensive background in tackling fraud within the private sector (such as financial services), we will share our experiences and explore how the approaches taken in the private sector could be applied to the public sector.
For further details of this event, please visit the event website.