Syed Rahman of Rahman Ravelli considers the creation of the Public Authorities Fraud Investigation and Enforcement Service and the challenge it faces.
Public sector fraud often seems a battle the authorities cannot win. The current UK government, however, is reinforcing its anti-fraud offensive with a new weapon: the Public Authorities Fraud Investigation and Enforcement Service.
The Public Authorities Fraud Investigation and Enforcement Service is to be created in an attempt to recover the huge amounts of public sector funds that are lost to fraud. Its creation was announced as part of the recent Budget. The intention is for the service to become operational within the next one to two years, deploying specialist investigators to recover public funds fraudulently obtained by those with no lawful entitlement.
It is now over a year since Tom Hayhoe started work as Covid corruption commissioner. Now his one-year fixed contract has come to an end, the new body - which has also been referred to as the Public Sector Fraud Enforcement Unit - is being lined up as his successor. There is talk of it trying what are described as innovative approaches to recouping the money lost to pandemic-related fraud. But, for now at least, details about these are thin on the ground.
Tom Hayhoe received Budget-day praise from Chancellor Rachel Reeves for helping recover almost £400 million while in his post. But from here onwards, the government is putting its faith in the new body, which the government is billing as a force that will relentlessly pursue more cases.
Doubts
A quick look at the figures shows just how relentless this new anti-fraud force will need to be. On leaving his post, Tom Hayhoe has reported that Covid-19 support programmes cost taxpayers nearly £11 billion through fraud and error. Even the most optimistic observer will have their doubts about the new body’s ability to recover a decent percentage of that amount.
To be fair to the government, it has not suddenly woken up to the issue of public sector fraud. Three months ago, it was stating that more than £480 million was prevented from ending up in the hands of fraudsters in the last financial year. This was the highest-ever such figure and included £186 million relating to pandemic fraud. This, unsurprisingly, led to the government making noises about its use of state-of-the-art technology to identify the bad guys and how it is clamping down on fraud.
But any clamp that is being applied to fraudsters is, for now at least, too small and not particularly tight. While £480 million being kept away from fraudsters is an achievement, the government itself has stated that fraud and error in public sector payments in 2021-22 totalled somewhere between £39.8 billion and £58.5 billion. The Public Authorities Fraud Investigation and Enforcement Service will, therefore, have a very large and very full in-tray when it does report for duty.
At present, we know little about precisely how the new organisation will go about its work. But the fact it has been created does at least indicate that the government is keen to tackle public sector fraud and is not reluctant to adopt new approaches (whatever they turn out to be) in pursuit of this. Given time, it could prove to be the shrewdest anti-fraud measure to come out of the corridors of power. But for now, it is merely an idea that is yet to become a reality. And only when that happens will we be able to assess its effectiveness.
It is commendable that the government is looking to tackle the long-running problem that is public sector fraud. But any fanfare for the new body should be put on hold until it achieves results.
