UK politicians looking to slash public spending or increase taxes should reduce losses from fraud in the public sector instead, estimated at a whopping £38bn. So says a report by accounting firm MacIntyre Hudson LLP, in conjunction with the Centre for Counter Fraud Studies at Portsmouth University.
Fraud* – “where someone intentionally or recklessly obtains resources to which they are not entitled” – is grossly underestimated in the UK, argues the report. Of 132 investigations into fraud in the public sector in the past decade, the average loss rate was found to be 4.57 per cent of total spend. The UK Treasury, by contrast, reports just £4.2m fraud, or 0.026 per cent, though this is qualified with the admission that “the analysis does not necessarily offer a complete picture”. Read more