Blog
Rayner my parade! The importance of specialist advice.
Jemma Brimblecombe
There is an epidemic of fraud in England and Wales – it now accounts for 40% of all crimes. And that is just the tip of the iceberg: many instances are under reported and under investigated due to limitations in police resources. It’s hoped that a new public sector authority may provide the impetus to tackle this huge burden.
The Covid-19 pandemic has contributed to the rising levels of fraud in the benefits system – the Department of Work and Pensions has estimated overpayment due to fraud and error at £8.5 billion between 2021 and 2022, the highest level on record.
As part of its response, the government has launched the Public Sector Fraud Authority (PSFA), its new “centre of expertise” for the prevention and management of fraud.
The PSFA has been given a target to detect and prevent £180 million of fraud in its first year of operation, backed by £25 million of funding (an arguably low figure). Longer term targets are expected to be announced by the end of 2023. Interim Chief Executive Mark Cheeseman OBE has described the PSFA as a “landmark step in our fight against public sector fraud.”
The PSFA will have full authority of the Cabinet Office and HM Treasury as it develops a portfolio laying out the highest risk areas of spending and the capability to deal with them. A CEO, who is yet to be announced, will brief the Cabinet and HM Treasury who in turn will advise on formal spending approvals. The PSFA will have a formal role in HM Treasury approval points in relation to policies with significant fraud risk or the development of counter fraud programmes.
Where the PSFA, HM Treasury and the Cabinet Office are working together to take action on a new area of concern, the parties will aim to reach and record a joint position. The PSFA will also have the option to take a formal legal view when there are areas of disagreement.
In order to develop capability in the public sector, ministerial departments and public bodies will have a number of responsibilities to engage with the PSFA and fulfil the PSFA’s recommendations for best practice. These responsibilities include taking recorded action on the recommendations from targeted reviews undertaken by the PSFA and providing accurate fraud and error loss data to the PSFA within agreed timescales.
So what does this mean in practice? Companies hold vast amounts of information which could be used to help identify and prevent fraud; the Office for National Statistics has estimated that that 53% of fraud is now online enabled. However, there is little sharing of this information between private and public sector bodies. The hope for the PSFA is that its mandate will enable the modernisation of fraud and error response through collaboration between experts, and develop capability in the public sector to more effectively prevent and respond to fraud under its real-time oversight.
This is not a wholly new strategy; the National Fraud Initiative (NFI), which will be maintained and innovated by the PSFA, is a data-matching exercise which unifies data between and for the public and private sectors with the aim of cohesively detecting and preventing fraud. This collaboration has had some success: between 2020 and 2022, the NFI service was used to detect and prevent more than £200 million of public sector pension fraud. The PSFA will build on this by creating a new National Counter Fraud Data Analytics Service with advanced data capabilities for public bodies to discover, combat and prevent fraud.
‘Tiger teams’ of fraud experts will analyse particular fraud problems and support the resolution of that problem. And there will be an independent advisory committee of recognised fraud experts from different sectors conducting continuous review to help shape a new, unified strategy.
It is widely considered that enforcing a common approach to tackling fraud is the most effective way to prevent people from falling victim to it. As fraud become increasingly present online, the UK’s approach needs to adapt to keep up. Through data analytics and information sharing, the PSFA seeks to flatten the curve and – it is hoped – have a bigger impact in responding to fraud.
Only time will tell how effective this approach will really be. But what is clear is that, with unprecedented levels of fraud taking place across all sectors, the new authority faces a daunting task.
FURTHER INFORMATION
Should you have any questions about any of the issues covered in this blog, please contact a member of our Public Law team.
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
You may also be interested in:
Blog
Preserve it and save: how conditional exemption can protect your heritage... and your wallet
Charles Richardson
Blog
Suspension of the UK’s Refugee Family Reunion scheme: an afront to the principle of family unity
Oliver Oldman
Share insightLinkedIn X Facebook Email to a friend Print