More than £400m of taxpayers’ money has been saved as the government clamps down on tax and benefits fraud
The latest figures from the National Fraud Initiative (NFI) showed that more than £400m was recovered in 2020-22, up from £250m in 2018-20, bringing total counter fraud savings to £2.4bn since the organisation was set up in 1996.
However, the figure represents a tiny percentage of total public sector fraud and error, which was estimated to be at least £33bn a year according to a 2022 report by the Public Sector Fraud Authority.
Pension fraud and overpayments made up the majority of fraud identified, representing £250m of the £400m fraud between 5 April 2020 to 31 March 2022, up from £55m over the two-year period from 2018 to 2020.
In addition, the government has provided an extra £359m in funding to tackle tax and benefit fraud, as it continues to track fraudsters and recover public money.
Jeremy Quin, minister for the Cabinet Office, said: ‘Money stolen from the government through fraud is theft from every taxpayer. This report shows we saved the taxpayer £443m.
‘To be more effective, earlier this year, we set up a new anti-fraud authority which is designed by and led by fraud experts whose express mission is to take the fight to fraudsters.’
The Public Sector Fraud Authority (PSFA), which was formed in March 2022, has been backed by £25m of new funding with a target of saving £180m for the taxpayer by April 2023.
The new authority houses the national counter fraud data analytics service, including the NFI, which uses data and analytics to identify and prevent fraud.
In Tameside, the Public Sector Fraud Authority used NFI data-matching to identify more than £40,000 in rates relief fraud, where a hospitality business lied to two councils about its size to receive small business support.
At the Autumn Statement, the government also announced that it will invest £79m to tackle tax fraud. HMRC will be given £48m to strengthen its approach to serious fraud, allowing the tax authority to pursue more cases, while another £31m will increase its capacity to deal with complex tax risks among wealthy taxpayers. This investment is expected to raise £725m over the next five years.
An additional £280m in funding for the Department for Work and Pensions to tackle fraud and error across the benefits system will also help to save £410m in the next two years and £2.2bn per year by 2027/28.
Mark Cheeseman, interim CEO of the Public Sector Fraud Authority, said: ‘Every day, people are attacking taxpayer funded services for their own gain. The PSFA is part of a wider investment across government to rise to this challenge.
‘In a difficult context, these latest results are still the best since the NFI started in 1996 – stopping more fraud than at any other point in its history and protecting public money and public services.
‘This achievement is a testament to the work of public servants across the United Kingdom, including Local Authorities and NHS Trusts, who are striving to find and stop fraud.
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