Legal development

National Audit Office finds room for improvement in efforts to tackle fraud

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    On 15 November 2022, the National Audit Office (NAO) published a report "Progress combatting fraud" in relation to the Home Office's efforts to prevent and reduce fraud. The accompanying Press Release claims:-

    "Government does not know the full scale of the fraud threat to individuals and businesses and is not yet leading an effective cross-government strategy to tackle it".

    The NAO's report identifies that about 80% of fraud offences in the UK are enabled through computer technology, and that tackling fraud therefore presents particular challenges because criminals can target thousands of victims remotely from anywhere in the world. The NAO concludes that the threat from fraud is increasing and evolving but the number of frauds resulting in a charge or summons is falling. Fraud was the single largest category of crime in England and Wales in the year to June 2022, constituting 41% of all crime against individuals. In the same year, about 6.6% of people aged over 16 in England and Wales were victims of actual or attempted fraud. The number of frauds recorded by the police has increased, from 631,000 in the year ending June 2017 to 987,000 in the year ending June 2022, but the number of fraud offences resulting in a charge or summons is falling: in the year ending March 2017, there were 6,402 such cases but this fell to 4,816 in the year ending March 2022. Less than 1% of police personnel were involved in conducting fraud investigations in the year ending March 2020.

    Although the Government has launched overlapping strategies covering fraud and economic crime, the Report concludes that it has yet to establish and report on any desired outcomes. The Report therefore recommends that the Home Office must complete and publish its strategy for tackling fraud as soon as possible, setting out:

    • the outcomes it is seeking to achieve and by when; and
    • a system-level plan for achieving the desired outcomes, which is underpinned by specific objectives and actions that are attributed to individual delivery partners and which is informed by an understanding of the resources they are able to deploy and the barriers they face.

    In addition, the NAO considers that the Home Office has limited influence over many of the organisations required to successfully combat fraud (the National Crime Agency, the City of London Police (the national lead police force for fraud), government departments and the finance, technology and telecoms sectors). The Home Office's relationships with the various bodies are at varying levels of maturity and they recognised that it needs to strengthen its influence in some areas − for example, by introducing new voluntary industry charters which set out the actions that partners have committed to take to reduce the risk of fraud. However, the NAO observed that (i) there can be inherent tensions in what is being asked of the private sector, because initiatives to reduce fraud can add processes that slow the customer journey; and (ii) the Home Office does not sufficiently understand the capacity and capability of its partners (such as in law enforcement and the private sector) to tackle fraud, which limits its ability to influence their activities.

    The Report goes on to recommend that the Home Office should (i) review and align the range of existing communication strategies so that partners present coherent and targeted messages to businesses and individuals about how they can protect themselves from fraud; and (ii) build on its early work with international partners to strengthen its understanding of the international response to tackling fraud and establish the relationships necessary to work effectively with overseas partners to address the threat posed by fraud. However, and unless this is to be encompassed in the above mentioned overarching strategy to tackle fraud, the NAO does not make any express recommendations on how the Home Office should tackle its limited influence over, and understanding of, its partners such as those in law enforcement and the private sector.

    We are awaiting a written response from the Home Office, as well a hearing before the Public Accounts Committee.

    Authors: Ruby Hamid and David Capps

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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