Government Departments and Agencies: Fraud and Error

Government estimates of the amount of money lost to fraud and error vary hugely, in truth: the latest estimate has a range of between £40 billion and almost £60 billion, which is a huge range. The public rightly expect us to do all we can to minimise fraud in the use of public funds, which is one reason why my right hon. Friend the Chancellor of the Exchequer has announced the establishment of a covid corruption commissioner, whose job it will be to track down as much as possible of the money lost to fraud during the pandemic. The Cabinet Office will work closely with the Chancellor on this to try to ensure best value for money for the public and, of course, crack down on fraud right across Government Departments and agencies.

Covid contract fraud has cost the public purse an estimated £7.6 billion, with the previous Government assigning contracts worth billions for useless personal protective equipment to those with close personal connections to Ministers through their so-called VIP lane. With the Chancellor announcing a new covid fraud commissioner this week, can the Minister please outline how his Department will work with the Treasury to support that commissioner, in order to ensure that this egregious waste of public money is rectified and the British taxpayer gets back what they are owed?

My hon. Friend is absolutely right to draw attention to what happened during covid, when VIP lanes and dodgy contracts ended up burning through billions of pounds, sometimes for unusable equipment. We will do everything we can to recover money that has been lost, and my Department will work closely with the office of the covid corruption commissioner to oversee that work and try to ensure the best value possible for the taxpayer.

New technology must be at the beating heart of the new Government, and artificial intelligence presents an opportunity to tackle waste and error. The National Audit Office has claimed that the counter-fraud agencies are only just beginning to utilise new technologies in their fight against public sector fraud, and rely on outdated legacy systems and incomplete, time-lagged data. How will the Minister implement new technologies, including AI, to tackle fraud and error in government?

My hon. Friend is absolutely right: there is potential for greater use of AI in detecting and rooting out fraud. We want the UK to be an excellent place to develop new uses of AI, both in its public sector applications and the development of private business. There is already a single network analytics platform, which is an AI-based detection tool to help public sector organisations detect fraud, but like many AI applications, we are probably only at the beginning of what can be achieved in this area. We should use every technological tool at our disposal to secure best value for money for the taxpayer.

As well as Matt Hancock’s pub landlord scoring a PPE contract despite having zero relevant expertise, non-covid error, fraud and waste cost the public purse £58.5 billion in the year 2020-21 alone. Could my right hon. Friend tell us how those colossal sums of money will be recovered? He mentioned a commissioner; can he also tell us how we will get rid of cronyism and nepotism, so that these things never happen again?

My hon. Friend is absolutely right to draw attention to the scale of the problem. The truth is that, according to the latest figures, the amount that has been recovered is relatively small compared with the scale of loss. The previous Government’s own former Minister for counter-fraud described the Conservative party’s record as “nothing less than woeful” and riddled with “schoolboy errors”, and the shadow Business Secretary, the hon. Member for Thirsk and Malton (Kevin Hollinrake), described the previous Prime Minister’s handling of this issue as dismissive. We cannot afford to be dismissive: we have a duty to take it seriously and use whatever means we can to bear down on fraud, so that money meant for public services and legitimate recipients of public funds is used for its intended purposes.

I want to highlight innocent errors where Government systems are failing to pick up overpayments and as a result people are chased. I am thinking particularly of unpaid carers earning just a few extra pounds, which means that the Department for Work and Pensions is clawing back thousands from them in carer’s allowance, because HMRC systems fail to alert the DWP when earnings have increased. What is the Cabinet Office doing to ensure that Government systems properly work to stop these things happening?

This issue has been highlighted more than once in the Chamber this week. We are of course hugely appreciative of the job that carers do, and that has to be balanced with the proper use of public funds so that those funds get to the intended recipients. Where there are overpayments, they do need to be recovered in the interests of the taxpayer, but I hope that is always done in a proper and compassionate manner.

I very much welcome the Minister to his place and wish him well in the role he now plays. This is a vastly important question right across the whole United Kingdom of Great Britain and Northern Ireland. Does he hold statistics for Northern Ireland on the costs of fraud and error to the public purse, and what discussions will he undertake with the devolved institutions to improve financial decisions, particularly at the Northern Ireland Assembly?

This is my first but I suspect not my last exchange with the hon. Member. I have not seen a specific breakdown of this figure for Northern Ireland, but I can tell him that we take relations with Northern Ireland extremely seriously. That is why the Prime Minister went to Northern Ireland, as well as Scotland and Wales, on the weekend after the general election.