Request a demo

Disfigured by Austerity – can the public sector recover?

Author: Julie Hewitt
Date: April 2023

From the Casey report to Breaking the Chain, the public sector has had a barrage of reports issued in the past few months – mostly damning in their assessment of the public sector’s capability and performance in detecting and preventing fraud.  I examine the various reports and consider what this means for the future of the public sector, fighting fraud, and how technology can help with improving the effectiveness and efficiency of investigations.

The reports[1] reviewed have common themes – investigating fraud remains labour intensive and highly time-consuming, resulting in heavily burdened resources who simply can not turn every stone or follow every line of enquiry. Where investigations overlap between government agencies and police forces, there is no clear line of sight. Leadership has been questioned through the Casey report, the HMIC Vetting report and in the Breaking the Chain report.

The public sector faces significant challenges in not only preventing and detecting fraud, but in vetting and the running of the public sector – both in Policing and Government. It would be too simplistic to say that with adequate funding these challenges will diminish, and with the right leadership all the deep cultural challenges within the MET and within the Government will be resolved. But funding is key – without it, there are not enough resources, technology or otherwise, to tackle fraud, vetting or any other labour intensive exercise.

Where will the funding come from?

The Government has invested over £750m[2] since March 2021, of which; £24.7m has gone into the Counter Fraud Centre of Expertise to “enhance its role and mandate” and; to create the Public Sector Fraud Authority (PSFA), and investing money in their staff’s ability to detect fraud by further enhancing their Counter Fraud Profession.

In its Response to Breaking the Chain paper[3], the Government confirmed their view that “more funding is clearly needed” and but also acknowledged the difficulties in doing so. The much anticipated Fraud Strategy – detailing how law enforcement will tackle economic crime, including fraud – has been allocated £400m through the Spending Review[4] for the next three years. The Home Office will continue to fund the National Economic Crime Centre (NECC) in the National Crime Agency (NCA) and police forces, with over £15m each year dedicated to the City of London Police (CoLP) as the national lead for fraud. But is this enough funding to solve the problem?

The Met police, conversely, has had its’ funding eroded by £0.7billion[5] (since the start of the previous decade) which means its 18% less budget with which to Police a growing population with evolving challenges. On the face of it, their funding cuts aren’t as disastrous as the picture paints; specialist teams have ring fenced funding, somewhat distorting this picture.

Speaking to the Treasury Committee the Director General of the NCA, Graeme Biggar, told MPs that they requested an additional £80 million to fund law enforcement activity but they received only £42 million in the 2021 Spending Review.

This lack of resource presents challenges for staffing across policing – in the 43 territorial constabularies of England and Wales in 2021, just 1,753 staff (0.8%) were focussed on economic crime, equivalent to 2.1 officers for every 1000 fraud offences[6]. The Police Uplift Programme is recruiting an additional 20,000 officers by March 2023 however, just 5.9% of these new resources is forecast to be dedicated to economic crime investigation[7]. The Social Market Foundation[8] suggests that 30,000 additional officers should be focussed on economic crime to redress this imbalance. This presents a huge cost to the taxpayer.

The report contributors suggested the creation of an economic crime fighting fund that would see “funds raised by agencies reinvested on top of their core budgets”. Between 2016 and 2021, law enforcement bodies fighting economic crime secured £3.9 billion via fines, confiscation, forfeiture, and civil recovery orders – a sum greater than that needed to pay for an additional 30,000 investigators. Automation technologies have demonstrated consistent efficiencies of up to 85% compared with manual fraud investigations[9], meaning that a healthy balance could be struck between recruiting more staff and simply providing better technology to those existing team members for a far smaller sum of money.

The Economic Crime Plan 2 is underpinned by significant investment of £300m from 2022-2025, with £200m of Government investment and £200m from the Economic Crime (Anti-Money Laundering) Levy – but it cannot be spent on “fraud” and will only be used to fight money laundering as the consultation did not receive support for the inclusion of fraud.

The report has recommended that the Government commit to a long-term funding strategy “with an increased offer for law enforcement agencies, focussed primarily on recycling revenue collected by law enforcement agencies back into law enforcement activity.

Working with the private sector the answer – but why hasn’t it been happening?

increasing Law Enforcement resource alone will not be sufficient and that private sector partners will need to play a significant part in combating this crime”.[10]

The Breaking the Chain report really hit hard in its recommendations to Government, prompting the response:

“We recognise that the government will be unable to fight fraud alone and that a unified and co-ordinated response from government, law enforcement and the private sector is required. Together we can better protect the public and businesses, reduce the impact of fraud and increase the disruption and prosecution of fraudsters”.

Did it hit home? Many of the responses provided statements detailing how Government are already tackling the issues identified in the report.

The Economic Crime Plan may have the answer – its remit is to “take a multi-stakeholder approach” to its development and implementation. Endeavours to tackle economic crime can be supported by “improved information sharing and wider structural reforms, including the planned new legal powers to transform Companies House into a proactive gatekeeper, and a clearer regulatory and fraud prevention framework for new private sector gatekeepers to the digital economy”. The plan is clear: we must establish a “whole system” approach across a public-private partnership and the Government Fraud Strategy – now more important than ever given the threat posed to national security.

With a public-private partnership so crucial, what is holding it back?

From experience, its knowing who the right partners are for this partnership that is holding it back. The public sector are swamped with suppliers proposing their services, claiming to be the answer to their prayers, which is why a rigorous procurement route is key. The problem then becomes that if the buyer doesn’t understand what is in the market and what their requirements are, its very difficult to create a tender that will solve the problem. Market engagement is key, reaching a broad range of suppliers and capturing new to market services and tools that can enlighten and inform. Creating trusted relationships is vital to building valuable partnerships.

What about vetting  – can that be fixed?

The HMIC vetting report provided 43 recommendations and five areas for improvement. The recent Vetting of Conduct[11] sets out the expectations of the Chief Officers in relation to vetting, and is seeking views of the public – critical in the light of the Wayne Couzens and David Carricks cases. Not every force had major vetting failures, but the cases in the public eye certainly calls for renewed inspectation of how vetting is undertaken and aftercare is provided.

In summary….

Theres a lot of work to be done in the public sector to prevent and detect more fraud, establish new vetting standards and tackle other salient issues, but there is a lot of good work going on in the public sector – from the reforms at Companies House, Public Sector Fraud Authority plans to Baroness Caseys recommendations – the private sector is ready and waiting to support these changes with innovative tools to support efficiency and efficacy.

For information on how Synalogik Innovate Solutions can help the Public Sector contact us at public.sector@synalogik.com

Sources

[1] Baroness Casey Review www.met.police.uk/SysSiteAssets/media/downloads/met/about-us/baroness-casey-review/update-march-2023/baroness-casey-review-march-2023.pdf;

An inspection of vetting, misconduct and misogyny in the police service https://www.justiceinspectorates.gov.uk/hmicfrs/publications/an-inspection-of-vetting-misconduct-and-misogyny-in-the-police-service/;

Covid-19 business grant schemes https://www.nao.org.uk/reports/covid-19-business-grant-schemes/;

Cross-Government Fraud Landscape https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:c13089cf-733f-44fa-a051-d83d1196fcd3;

Fighting Fraud – Breaking the chain https://publications.parliament.uk/pa/ld5803/ldselect/ldfraudact/87/87.pdf Government response to Fighting Fraud – Breaking the chain https://committees.parliament.uk/publications/34321/documents/188908/default/;

Digital Transformation – addressing barriers to efficiency www.nao.org.uk/wp-content/uploads/2023/03/digital-transformation-in-government.pdf;

Tackling Fraud and Corruption against Government www.nao.org.uk/wp-content/uploads/2023/03/tackling-fraud-and-corruption-against-government.pdf; Economic Crime Plan 2023-2026 https://www.gov.uk/government/publications/economic-crime-plan-2023-to-2026

[2] Tackling Fraud and Corruption against Government www.nao.org.uk/wp-content/uploads/2023/03/tackling-fraud-and-corruption-against-government.pdf;

[3] Government response to Fighting Fraud – Breaking the chain https://committees.parliament.uk/publications/34321/documents/188908/default/

[4] https://www.gov.uk/government/publications/spring-budget-2023

[5] Baroness Casey Review www.met.police.uk/SysSiteAssets/media/downloads/met/about-us/baroness-casey-review/update-march-2023/baroness-casey-review-march-2023.pdf;

[6] Fighting Fraud – Breaking the chain committees.parliament.uk/publications/34321/documents/188908/default/;

[7] Fighting Fraud – Breaking the chain committees.parliament.uk/publications/34321/documents/188908/default/;

[8] Fighting Fraud – Breaking the chain committees.parliament.uk/publications/34321/documents/188908/default/;

[9] Trials and PoCs conduct by Synalogik Innovative Solutions between 2021 and 2022 demonstrated resource savings of up to 93% efficiency compared with manually logging in and out of data sets as part of the fraud investigation process. For one Government organisation Synalogik reduced the time taken to profile individuals from 4.5 days to circa two minutes.

[10] Fighting Fraud – Breaking the chain committees.parliament.uk/publications/34321/documents/188908/default/;

[11] https://assets.college.police.uk/s3fs-public/2023-02/Vetting-Code-of-Practice-consultation.pdf

About Synalogik

Synalogik deliver innovative solutions that improve the efficiency and effectiveness of compliance and fraud investigations through innovative software and unparalleled access to consumer and business data. Our flagship product is our data aggregation and automation platform Scout® which is unique in its capability to aggregate data from Synalogik, open, closed, third party and proprietary sources, allowing investigators and analysts to automate complex enhanced due diligence and fraud investigations.

In 2022, we secured a Series A investment from Bill Currie and former Tesco CEO Sir Terry Leahy and, among other awards, the Queen’s Award for Innovation. Our current customers include Hasting Direct, The Insolvency Service, Entain, Betway, Buzz Bingo, BetVictor, AIG and Marble Arch Insurance.

Julie Hewitt
Julie spent 17 years working in the Public Sector, Firstly in the Health & Safety Executive, then HM Revenue & Customs, where she worked as an Information consultant, and latterly as Data Contracts manager, supporting the procurement and delivery of HMRC's Commercial Data contracts and provided commercial support and governance to the business. From there she went to Equifax for over 7 years, where she headed up the Public Sector, supporting clients across Government, Police, Local Authorities, Housing and NHS. Julie led on all strategic procurement tenders, ensuring Equifax provided solutions that were fit for purpose and in line with client requirements and budgets. Building on her 24 years’ experience, Julie is now the Head of Government Sales within Synalogik. She ensures clients get the best solution to their problem, providing the Scout® platform and the right data to support investigations, intelligence, vetting, and fraud.