Labour responds to new research showing that £219 billion is lost each year in the UK as a result of fraud

Emily Thornberry MP, Labour’s Shadow Attorney General, responding to new research showing that £219 billion is lost each year in the UK as a result of fraud, said:

"This report lays bare both the astonishing increase in fraud that has taken place in our country under the current government, and the unforgivable complacency of their response. The estimated £219 billion that is being lost annually in the UK as a result of fraud is equivalent to this year’s entire central government running costs budget for health, defence and policing.

"In the face of these figures, the fraud strategy that the government published just six weeks ago already looks hopelessly inadequate and out of date. In its place, Labour will treat this plague with the seriousness it deserves, preventing fraud across every sector, punishing the criminals responsible, and protecting all of our communities and businesses."

Ends

Notes:

The UK Fraud Costs Measurement Committee (UKFCMC), an independent consortium of legal and academic experts from Portsmouth University, Crowe LLP, Peters & Peters LLP, took over responsibility for producing annual estimates of the total cost of fraud to the UK after the National Fraud Authority was scrapped in 2014. The UKFCMC’s last report before today, published in 2017, put the annual cost of fraud at £190 billion, comprising £140 billion of losses to the private sector, £40.4 billion to the public sector, £6.8 billion to consumers, and £2.3 billion to charities.

https://pure.port.ac.uk/ws/portalfiles/portal/18878333/Annual_Fraud_Indicator_report_1_2017.pdf

Today’s new report, which can be accessed via the Crowe LLP website (link below), puts the total cost of fraud in the UK in 2023 at £219 billion (an increase of 15 per cent), including £157.8 billion of losses to the private sector, £50.2 billion to the public sector, and £8.3 billion to individual consumers. 

https://crowe1.co.uk/s/abd437ed45dcd1e8a4ec3685053a0fc3044c2d98

The two biggest categories of private sector losses highlighted by the new UKFCMC report relate to procurement fraud (£133.6 billion), and payroll fraud (£14.9 billion). In a letter to Home Secretary Suella Braverman on 11th May, responding to publication of the government’s fraud strategy, Shadow Attorney General Emily Thornberry pointed out that: “In a 22,000-word report presented as ‘a cross-government strategy that covers fraud where the victims are members of the public or businesses’, the two biggest offences in that category – procurement and payroll fraud – are not mentioned once.” 

https://twitter.com/EmilyThornberry/status/1656670105391230980

The new UKFCMC report highlights that “public sector fraud is estimared to be £50.2 billion for 2021 compared to £40.4 billion for 2017, an increase of approximately 25% in the intervening period. The increase in fraud losses are largely due to increased procurement fraud (+£4.4 billion) as the government spent more than the previous year, and increased tax fraud losses (+£1.94 billion).”

In the government’s fraud strategy, published on 3rd May, the only estimate (at Paragraph 11) provided of the total cost of fraud in the UK related exclusively to members of the public, with the Home Office’s analysis putting that cost at £6.8bn per year, an estimate more than a fifth lower than that published today by the UKFCMC for consumers, and more than thirty times lower than the UKFCMC’s estimate of total costs. 

https://www.gov.uk/government/publications/fraud-strategy/fraud-strategy-stopping-scams-and-protecting-the-public 

On 14th October 2022, Shadow Home Secretary Yvette Cooper, Shadow Justice Secretary Steve Reed, and Shadow Attorney General Emily Thornberry wrote to their counterparts expressing concern about the lack of an official government estimate of the UK’s current total fraud losses. That letter can be seen here: 

https://twitter.com/EmilyThornberry/status/1580953499944505344

According to Table 2.1 of the Spring Budget 2023, Resource DEL allocations in 2023/24 were £176.2 for the Department of Health and £32.4bn for the Ministry of Defence, while the Police Funding settlement for 2023/24 included £9.6bn of central government funding for PCCs and a £1.3bn allocation for national priorities and serious violence, all adding up to a total budget of £219.5bn for day-to-day spending across the three areas in the current financial year.