Fighting Fraud – The UK’s Labour of love

With the election now a distant memory, thoughts now turn to the new government’s manifesto, and in particular, its proposed approach to the 'pandemic' that fraud has become in the UK. As at the end of 2023, the levels of fraud doubled in the last twelve months. They currently stand at £2.3bn, with half of the high-value frauds being over £200m.

When the previous government pledged extra resources to HMRC to fight covid loan fraud, which is estimated to have cost the taxpayer over £20bn, experts and academics were expecting a flood of investigations and prosecutions arising from loan applications that were made, and seemingly handed out, with very little due diligence by the government as it sought to stave off financial distress.

However, that did not prove to be the case. Although the £100m Task Protection Taskforce of 1,200 HMRC staff was assembled, HMRC was expected to recover a mere £1.5bn by the end of 2022/23. In terms of prosecutions, they did not even light the touch paper, with the former government’s Minister of State at the cabinet and HM Treasury, Theodore Agnew, quitting his role in 2022 in protest at Rishi Sunak’s failure to tackle fraud during the Covid-19 pandemic.

A zero tolerance approach

The government is seeking to right the apparent Conservative wrongs by appointing a fixed Covid Corruption Commissioner and to “use every means possible to recoup public money lost in pandemic-related fraud”.  It is reported that the Commissioner will work with HMRC, the Serious Fraud Office and the National Crime Agency to examine an estimated £7.6bn worth of Covid-related fraud.

The government’s election manifesto pledged that neither fraud or waste would be tolerated anywhere. It proposed to introduce a new expanded fraud strategy to tackle the full range of threats, including online, public sector and serious fraud. Plans have been revealed whereby the government will seek to work closely with, and support tech companies, to stop their platforms being exploited by fraudsters. The Digital Information and Smart Data Bill recently introduced in the King’s Speech, which proposes establishing Digital Verification Services to provide for identity verification, may be the first of several approaches the government intends to introduce to mitigate risk. Further details are yet to be seen, but there appears to be an added emphasis to respond to the Conservative Party’s seeming failure to “respond to the scale of the challenge”.

However, as ever, the issue has been (and may well remain) the lack of resources being made available to put grand statements and the previous government's plans into action. Unless that hurdle is overcome with substantial extra funding that will do more than just paper over the cracks in the criminal justice system, the government’s plans will remain a pipedream, resulting in the continuation of an increasing backlog of cases in the courts.