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MPs today accuse Whitehall of “flying blind” on the scale of corruption and fraud in government as the country’s international reputation slumps due to the huge rise of financial scandals surrounding Coronavirus contracts.
A report by the Commons’ Public Accounts Committee reveals that, apart from the £16.4 billion estimated tax and benefit fraud found by the National Audit Office last year, ministers have no idea about the level of fraud in the rest of government.
Present estimates suggest that this could amount to anything from an additional £2.5 billion to an astonishing £28.5 billion as nobody has quantified it.
The quadrupling of the amount of annual estimated fraud under Rishi Sunak’s chancellorship and his time as Prime Minister – from £5.5 billion to £21 billion during the pandemic – has had a significant impact internationally for the UK.
The report emphasises that the annual findings of the Corruption Perceptions Index – formulated by Transparency International from a series of expert reports and used as a guide by the World Bank – shows that the UK has gone from being perceived as the eighth least corrupt nation out of 180 countries to the 18th least corrupt between 2017 and 2022. A drop of 10 places.
This year, for the first time, Uruguay was considered less corrupt than the UK – alongside Singapore, Hong Kong, Estonia and Ireland as well Commonwealth countries such as New Zealand, Canada and Australia, and the Scandinavian nations Denmark, Finland, Norway and Sweden. The most corrupt countries in the world are perceived to be Somalia, Syria and South Sudan.
Alex Chisholm, permanent secretary at the Cabinet Office, giving evidence to MPs, blamed what he called “noisy reporting” by the media covering Coronavirus financial scandals for contributing to the decline in the UK’s perceived international standing.
This led to a strong response from Labour’s Dame Meg Hillier, the committee’s chair, who accused the Government of “flying blind” on the levels of fraud and corruption perpetrated against it “despite widespread awareness of the toxic threat posed by these despicable crimes”.
“The Cabinet Office has blamed worsening public perceptions of the UK’s fraud and corruption on ‘noisy reporting’ from the media,” she added. “It is time for some noisy reporting back from the most senior government officials on quite how seriously it is tackling this worsening problem, with examples of fraud not being allowed to go unpunished.
“The risk of fraud and corruption in public life, both from internal and external threats, is of course ever present. But this should be spurring government to recognise and prepare for it as an ongoing risk, rather than simply accepting it. If senior officials and politicians simply shrug their shoulders and look away in the face of these outrages, then malign actors will continue to pick away not just at the public purse, but at the bonds of trust that knit us together as a society.”
The report warns that issues such as COVID fraud are threatening public trust in government and that the Government needs to take action – including increasing criminal and civil prosecutions for perpetrators.
The Government has set up a new body, the Public Sector Fraud Authority , which is jointly run by the Treasury and the Cabinet Office, to tackle fraud outside tax and welfare fraud. So far, it has issued a strategy on how to tackle fraud in central and local government. It is planning to set up a central enforcement unit which will pursue fraud discovered by other departments so it can take tougher action.
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Having asked the department to respond to the report, Byline Times received a call from a man saying that he was from the Cabinet Office press office, responding to the request for comment. He told Byline Times that he backed the report’s findings and agreed that the Government should be noisier about tackling fraud. “I have been aghast at what has been happening,” the man added. When pressed on providing such a strong response on behalf of the Cabinet Office, he said: “I could give you a lot of stuff but I wanted to give you honest answers to your questions.”
Two hours later, the Cabinet Office issued an email response to Byline Times. When this newspaper said it had already received a phone call providing a comment, the Cabinet Office denied that the call had been from the department and pleaded with Byline Times to use the official statement, which did not answer any specific questions.
In the statement, a spokesman said: “We are overhauling the way we tackle public sector fraud to ensure we prevent more fraud and chase down public money stolen from taxpayers. Since 2021, we have invested more than £900 million in taking action on fraud, and have established the Public Sector Fraud Authority to bolster fraud defences across departments.
“In the last two years, the Government has recovered more than £3.1 billion of fraud losses, including within COVID-19 schemes, but we know there is more we can do.
“That is why we are expanding the Government’s Counter Fraud Profession, developing new technologies and boosting skills and training to further protect the public purse.”