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UK gov to bust fraudulent IT suppliers

Scams cost taxpayers £2.4bn in 2011

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The Coalition has concocted a four-pronged strategy to cut the £2.4bn problem stemming from public sector procurement fraud.

According to estimates from the National Fraud Authority (NFA), central and local government fraud will cost the UK £1.5bn and £855m respectively in 2011, a relatively small fraction of total fraud losses for the year of £21bn, with tax evasion accounting for nearly three quarters of this.

The Taskforce on Fraud, Error and Debt – set up in late 2010 to underpin cross-Whitehall efforts to tackle scams – plans to foster greater collaboration across the public sector to share intelligence on fraudsters; assess the risks and costs of fraud before projects get the green light; prevent instances rather than just detect and punish them; and operate a zero tolerance policy on scammers.

A Cabinet Office report, "Eliminating Public Sector Fraud", stated: "Taken together these priorities will enable the government not only to prevent fraud but to detect, deter correct and punish offenders.

"Fraudsters attack the public sector across the board and exploit government processes at their weakest points; to combat this threat will require unprecedented cross government collaboration," it added.

The NFA was unable to detail the proportion of procurement fraud related to IT but the report said it occurred both during the "contracting phase" and after awards have been made.

"Examples include collusion between suppliers to fix the price of goods or services provided to the public sector, through to false or duplicate invoicing to receive multiple payments on existing contracts," the Cabinet Office said.

Given that the £2.4bn spans all types of fraud, it may be that IT-related shenanigans are just a drop in the ocean.

And anyway, the government seems more than capable of losing vast sums on IT perfectly legally, including the £12.75bn spent on the National Programme for IT, IT integration issues resulting in fraud and errors costing £2.5bn, £234m sunk into National Offender Management Systems, and nearly £300m splashed on the national ID cards project. ®

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