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The Cabinet Office says data-matching has helped its anti-fraud initiatives to stem huge losses from government funds.

The government has said that three pilot projects aimed at tackling the £21bn lost each year through fraud and error have delivered £12m worth of savings in their first few months.

According to an interim report (22-page PDF/486KB) by the department, a pilot at HM Revenue and Customs (HMRC), which ran between September 2010 and March 2011, prevented the loss of £10.63m. It used "a new screening technique" for tax applications, and by analysing information on tax credit application forms, assessed the likelihood of the application being fraudulent.

The Cabinet Office said that this enabled HMRC to better prioritise its counter-fraud checks, and that HMRC expects to save £256m over the next four years by rolling the technique out across all new tax credit applications.

At the Department for Transport (DfT), £500,000 has been saved by identifying losses from payments made to suppliers. The report says the DfT commissioned a data analytics company to audit its group procure-to-pay systems, to detect and recover overpayments to suppliers.

The Cabinet Office also disclosed that the Home Office undertook the same exercise and detected £4m in overpayments. Applying these techniques across all departments could identify and recover £264m on just one year of spending, it believes.

A third pilot which used credit reference agencies to verify the circumstances of 20,000 benefit and tax credit claimants has saved HMRC £1.5m and the Department for Work and Pensions £500,000.

The pilots are part of the work of the Taskforce on Fraud, Error and Debt, set up by the coalition government in 2010 to create a cross-Whitehall group to address losses.

The interim report calls for greater sharing of information between procuring departments on companies which routinely overcharge, and on false identities.

Francis Maude, the Cabinet Office minister, said: "The taskforce has made a good start and has already demonstrated that immediate cashable savings can be made from doing fairly simple common sense checks. Going forward we must take this further and work together to combat fraud across all public sector organisations."

This article was originally published at Guardian Government Computing.

Guardian Government Computing is a business division of Guardian Professional, and covers the latest news and analysis of public sector technology. For updates on public sector IT, join the Government Computing Network here.

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