Plugging the leaks

Leaking pipe The IFS has today said that no party goes anywhere near close enough to detailing the cuts that they will need to reduce the deficit. Real detail in cuts should be spelled out to the British public, who are intelligent and mature enough to handle and debate them, in order to save the sinking ship of Britain's public finances.

Of course, in a sinking ship it's important to plug any leaks. A report out yesterday estimates that fraud in the public sector costs UK taxpayers £38 billion a year - a significant sum which if tackled would help ease the deficit. The Centre for Counter Fraud Studies (CCFS) at the University of Portsmouth produced the research, The Financial Cost of UK Public Sector Fraud, along with MacIntyre Hudson LLP. Analyses of 32 statistically valid samples of payments or expenditure in the public sector were carried out, and were then reviewed for evidence showing the presence of fraud and error.

The research claims that existing estimates for losses to fraud are way off target. For example, official estimates say that loss in local government is £684 million, while the report says it is actually closer to £5.5 billion - a huge disparity. In the NHS, fraud costs £263 million, according to official estimates; CCFS and MacIntyre Hudson argue that this is more like £2.8 billion. One of the authors of the report actually worked in fraud prevention in the NHS and was successful in bringing it down during his time there, so the differences in these figures are certainly telling.

What's clear is that there needs to be a more robust and honest analysis by the public sector of the money lost to fraud. Only then can proper steps be taken to tackle it, and help plug the gaping holes in the public finances to keep the ship afloat.

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