Fraud

(asked on 25th January 2022) - View Source

Question to the Cabinet Office:

To ask the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, how much (a) has been lost from the public purse as a result of fraud, scams and economic crime and (b) has been recovered to the public purse having been lost to fraud, scams and economic crime in each of the last five years.


Answered by
Michael Ellis Portrait
Michael Ellis
This question was answered on 7th February 2022

The government publishes an Annual Fraud Landscape Report or Bulletin. The 2019/20 Fraud Landscape Bulletin states that our best estimate of the total fraud and error losses to the government is between £29bn and £52bn per year. This is an estimate built from the best available evidence on fraud and error loss.

HMRC produces annual estimates of loss (Measuring Tax Gaps) based on statistical sampling. The closest fit to fraud and economic crime are the criminal attacks and evasion categories. HMRC also produces a loss estimate for tax credits - this is made up of fraud and error - not just fraud. Since 2017 (1), HMRC has reported ‘additional tax generated,’ which is made up of a wide range of compliance activities to recover due tax, not all related to fraud. With regards to serious tax fraud, the HMRC Fraud Investigation Service has recovered over £1bn of criminal assets using a combination of both civil and criminal recovery powers over the last 5 years.

15/16

16/17

17/18

18/19

19/20

HMRC Criminal Attacks and Evasion + Tax Credit Estimated loss

£11.3bn

£11.6bn

£10.8bn

£11.2bn

£11.6bn

HMRC Additional Tax Generated

n/a

n/a

£26.1bn

£29.3bn

£31.8bn

DWP produces annual estimates of the fraud and error in the benefit system based on statistical sampling. The losses are apportioned between fraud and error. DWP also produces figures on recoveries of overpaid benefit each year, however, is it not possible to break this down to just fraud - it is made up of fraud, claimant error and official error. DWP’s reporting includes 2020/21 which shows a marked increase in loss level post-pandemic.

16/17

17/18

18/19

19/20

20/21

DWP Estimated Value of Fraud and Error

£3.6bn

£3.8bn

£3.9bn

£4.6bn

£8.4bn

DWP Estimated Value of Fraud

£2.0bn

£2.2bn

£2.1bn

£2.8bn

£6.3bn

DWP Recovered Fraud and Error (Official and Claimant)

£1.1bn

£1.1bn

£1.1bn

£1.0bn

£800m

The ‘rest of government’ (e.g. not HMRC and DWP) report detected fraud and recoveries through centrally and this is published in the Government’s Annual Fraud Landscape Report or Bulletin. Information on fraud recoveries was not collected until 2016/17. The rest of government figures are below:

15/16

16/17

17/18

18/19

19/20 (2)

Rest of Govt Detected Fraud

£73.6m

£119m

£151m

£99m

£227m

Rest of Govt Recovered Fraud

n/a

n/a

£12m

£22m

£26m

(1) The CCG (Customer Compliance Group) was created in 2017, hence the inability to report previous figures.

(2) The 19/20 figures largely predate Covid-related fraud.

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