Government bets on tech to cut £21 billion fraud

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The Government has revealed plans to use various kinds of technology to tackle the £21 billion bill caused by fraud every year in the public sector.

Minister for the Cabinet Office Francis Maude outlined plans today to take forward proposals outlined in a report from the Counter Fraud Taskforce.

The Taskforce has carried out a number of pilots to cut fraud, which have already delivered savings of £12 million in just a few months, according to the Government.

Every pound defrauded from the Government means that there is less to spend on frontline services like healthcare, education, policing and defence.

One notable success was the use of data analytics to assess the likelihood of a tax application being fraudulent. This technique, used in a pilot between September 2010 and March 2011, provided £10.63 million of savings, according to the Cabinet Office.

To give people a nudge on paying tax, the Taskforce also sent text messages with reminders to those people more likely to miss payments.

The changes will form part of the Government’s “zero-tolerance approach to tackling fraud,” Maude said.

“Every pound defrauded from the Government means that there is less to spend on frontline services like healthcare, education, policing and defence,” he said.

“The Taskforce has made a good start and has already demonstrated that immediate cashable savings can be made from doing fairly simple common sense checks. Going forward we must take this further and work together to combat fraud across all public sector organisations.”

Security firm Detica welcomed the report, in particular praising the Government’s adoption of data analytics capabilities.

“As Government increasingly takes its services online, it will be important that criminal behaviour is better understood – drawing on expertise and existing data from across sectors can spot suspicious activity early on and successfully prevent fraud before it occurs,” said Vicki Chauhan, director for Government practice at Detica.

“Being able to assess the risk of an application for a benefit, or a request for a tax rebate in real-time is the nirvana for both great citizen service and effective fraud prevention. This is the norm within industries such as banking and insurance, and will ensure that public sector investigators don’t waste time and money investigating false positives.”

The Cabinet Office also talked up the need for greater collaboration across departments in tackling fraud. Removing silos was a key point in Maude’s recent IT strategy report, which notably did not include a mention of the G-Cloud project.

Last week, HP’s UK managing director Nick Wilson told IT PRO the programme had been dropped.

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