The role of the UK’s Public Sector Fraud Authority is “more important than ever” Alan Sheeley of Pinsent Masons told Parliament as ministers discussed plans to recover lost expenditure relating to the government’s pandemic ‘Bounce Back Loan’ scheme.

The initiative, which was set up in 2022 after the pandemic, is poised to prevent and target hacking attacks to fraudulently obtain government loans.

Fraud against public bodies is in higher volume while many do not have a clear picture on the extent of the problem due to a lack of anti-fraud resources.

The NAO that last reported on the government’s fraud action in 2016 concluded that the public sector could have better handled the fraud risk while maintaining an emergency response. Likewise the authority’s judgement concurred that government has a culture of misunderstanding and insufficient measures of the fraud threat although some progress has been made since the 2016 inspection. The Government Counter Fraud Function was established and together with the PSFA was responsible for being the centre of expertise, bringing together 13,000 professionals countering fraud activity across the public sector.

Gareth Davies, head of the NAO said:

“There has been a substantial increase in the level of fraud reported in the annual reports and accounts we audit. In addition to the loss of taxpayer money, it creates the risk that people come to perceive fraud and corruption across government as normal and tolerated. If not tackled, this could affect public confidence in the integrity of public services.

“Government has more to do to understand the scale of the problem it faces and cannot yet demonstrate that it is tackling fraud effectively. The creation of the Public Sector Fraud Authority creates a real opportunity to address this.”

The government’s partner enrolled the use of Quantexa’s Artificial Intelligence technology in January this year in a £4 Million contract towards the investment strategy to tackle fraud. As of September 2022, public spending fraud and error loses cost the taxpayer £33bn a year.