Fraud is a challenge to every organisation operating in the world today. Our best estimates for the UK public sector suggest that between £31bn and £49bn is being lost from the public purse to fraud and error each year. This is a challenge that requires a constant effort to tackle – fraudsters are highly resourceful and relentless in their attacks.
Data is a critical resource that can enable government to work more efficiently. The government collects huge amounts of data fulfilling its responsibilities and is committed to understanding and unlocking the power of data to deliver the best public services as effectively as possible.
These two important agendas come together in how government is actively pursuing the use of data and analytics to find and fight fraud. Data and analytics has the potential to revolutionise how we deal with fraud in government. They can allow us to gather more comprehensive intelligence and to identify fraud more efficiently and quickly.
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It is right that we are being ambitious in pursuing this area, but we also recognise that we do not have all the answers. This is why government has just published a thought paper on how data and analytics, and counter fraud can come together. I would encourage all of those with an interest from all sectors to engage with this; to support and challenge us as we explore how we can innovate with the use of data and help us to protect public services by finding more fraud.
Collaboration is critical to the design and delivery of first class public services, especially so in counter fraud where fraudsters can and will target anyone. Government has a counter-fraud function to support collaboration internally; a cross-departmental structure where approaches, expertise, standards, and capability can spread across organisational boundaries. The centre of expertise in the Cabinet Office works to coordinate this function and create a government wide approach to counter fraud.
The experts and public bodies that make up this function are already innovating with the application of data and analytics. Major departments including HM Revenue and Customs, Department for Work and Pensions, and the National Economic Crime Centre in the National Crime Agency have used data to find more fraud. The National Fraud Initiative in the Cabinet Office identified over £300m of fraud between 2016 and 2018 by matching the data of local authorities with that of others. At the same time eight public bodies from across the UK have worked with the Centre of Expertise to pioneer new applications of data sharing and analytics; finding fraud in areas where it was not previously apparent.
However, despite what has been achieved it is important to realise that this is only a portion of the overall problem and we must challenge ourselves to go further. The scale and diversity of operations in the public sector mean that embedding and realising the benefits of the use of data more widely is not an easy task, or a quick one – there is no one big, easy solution in this space. Public bodies are increasingly able to identify the fraud risks in their operations, but the application of data and analytics to this and the subsequent work to address those risks, can still be difficult to do and inconsistent.
The tools being created across government, and those the Counter Fraud Centre of Expertise has developed, are already helping public bodies to make more use of data and analytics in countering fraud. Government has come together to create best practice guidance for counter fraud teams to follow when trialling the use of data and analytics for the first time. This is an important part of the functional approach, bringing together learnings from across government to ensure that we are building on the success and failures of the past. This guidance was instrumental to the success of the first pilots to make use of the new legal gateway for data sharing for counter fraud in the Digital Economy Act (2017).
A driving factor behind the success government has had with data analytics has been an increasingly collaborative approach. It is well known that parts of the private sector have already made great strides in applying data analytics to counter fraud. By working closely with experts from the private sector and academia, government has been able to build on their knowledge and develop solutions that otherwise may not have been possible.
Now as government is moving to address the next set of challenges and opportunities in this area we are not being complacent. I am keen that we open up more widely the engagement and collaboration that has supported this work so far. We are at our strongest when we collaborate like this, which is why the thought paper on “Tackling fraud in government with data analytics” is asking everyone who has a view to contribute their insights. Through challenging ourselves to work more collaboratively, to share across organisations and sectors, we can be increasingly confident that we are on the right path in bringing together counter fraud and the use of data, and that we will find and prevent more fraud.
Read the Tackling fraud in government with data analytics thought paper