Skip navigation | Accessibility and accesskey details | Sitemap

National Audit Office Press Notice

Tackling external fraud – a new guide by the NAO and HM Treasury

THIS STATEMENT IS FOR IMMEDIATE USE

A guide to help government bodies crack down on external fraudsters has been launched today by the National Audit Office and HM Treasury.

The new guide, Good Practice in Tackling External Fraud, highlights ways in which different government organisations work to combat and detect fraud by outsiders against public funds. Types of fraud range from individuals taking the opportunity to make small gains to, at the other extreme, organised crime groups carrying out premeditated systematic attacks for large sums of money.

Today’s guide calls on departments to consider whether they need to develop a package of measures specifically tailored to each type of fraud. There will not be a ‘one size fits all’ approach. But there is also much value in promoting a wider understanding of how other bodies tackle fraud and the good practices which are successful elsewhere.

In the foreword to the guide, head of the NAO Sir John Bourn and Treasury Permanent Secretary Gus O’Donnell acknowledged the good work being done across departments to tackle fraud but said:

"Billions of pounds of public money are still lost each year through external fraud. The law abiding public have the right to expect government departments and agencies to safeguard public funds and to crack down on those committing fraud. Departments and agencies need to make fraud as unattractive as they can.

"Total elimination of fraud is unlikely ever to be achieved, but it is important for momentum to be maintained and good practices developed and shared."

Among the many examples of good practice highlighted in the guide are the identification by the Inland Revenue of groups posing a high risk of understating taxable profits and the trialing of a new ‘leverage’ approach to exert direct influence on individuals within those groups. The results show that their approach has reduced understated profits. Customs have launched a tobacco publicity campaign designed to inform the public, would-be smugglers and key trade groups of what the law is and to persuade them to comply with it. Evaluation of the campaign has shown consistently high levels of awareness and support for Customs’ messages among the targeted trade groups and, among the public, increasing awareness of Customs’ action, the link to organised crime and the penalties faced by smugglers. And the NHS Counter Fraud Service has developed software capable of highlighting cases with an unusual data profile which can indicate potential fraud, e.g., individual dentists claiming for an unusually high level of complex work.

• Tackling External Fraud Guide (492 KB)

Notes for Editors

1. The diversity of external frauds faced by the public sector include the following:
• benefit claimants who fail to declare all earnings income or capital or who conceal family
  circumstances;
• people who claim exemptions from prescriptions to which they are not entitled;
• people who evade vehicle excise duty;
• people in the shadow economy who do not pay income tax or national insurance contributions;
• people and businesses who register with HM Customs or the Inland Revenue but fail to declare all transactions/income or assets on which tax is due;
• staff colluding with criminals to defraud the department or agency; and
• serious criminals evading tobacco, alcohol and hydrocarbon oil duties or committing organised fraud against the benefit system.
2. Press notices and reports are available from the date of publication on the NAO website,
   which is now at www.nao.org.uk.
3. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 800 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

Press Notice 35/04
All enquiries to Barry Lester, NAO Press Office:
Tel: 020 7798 7937
Mobile: 07748 181692