Baroness Neville-Rolfe’s Address at the Annual Fraud Conference

Thank you.

I’d like to start by referencing the notable novelist and former civil servant, Anthony Trollope.

“One tends to believe sometimes that any fool could run an honest business. Yet, fraud demands an individual to be alert and aware at every turn!”

As everyone here is aware, the government has long been combating fraud, but I believe it’s time to take further action — reversing the situation to ensure that it’s the fraudsters who are always on guard.

The challenge we face is clear. Fraud used to be the domain of opportunistic and cynical criminals, devising absurd schemes to deceive others.

Consider Victor Lustig, whose scams in the 1920s included masquerading as a French official intending to sell the Eiffel Tower for scrap metal.

The victim of his deception, Monsieur Andre Poisson, was so embarrassed by his gullibility that he never reported the incident to the authorities.

However, with society’s shift into the digital era, fraudsters no longer need to go to such extremes to profit from their crimes.

A simple text message or an application to a government initiative intended to assist those genuinely in need suffices.

If the digital landscape has made it easier for fraud to flourish, the pandemic has escalated this threat significantly.

Recent data from the Fraud Landscape Report indicates that the scope of fraud and error in the public sector has reached £33 billion. This represents a loss of 15 pence for every pound of income tax due to fraud.

Significant amounts are being siphoned from taxpayers by criminal networks often associated with organized crime syndicates. Some of these losses highlight a failure in designing schemes and grants that effectively deter and limit fraudulent activities.

If we fail to confront this threat to our public services with ambition, realism, and diligence, we risk eroding the trust the British populace has placed in us to stimulate the economy and reduce debt to enhance public services.

We build upon a robust foundation. The UK government proudly initiated the world’s first counter-fraud profession, continually enhancing the skills and expertise of those combating fraud.

We have established world-leading standards for managing fraud risk and have assisted teams across government in fortifying their defenses to ensure that crucial support reaches those most in need, rather than falling into the hands of criminals.

We are also advancing our efforts. I stand here today as a strong proponent of our newly founded Public Sector Fraud Authority and as a champion for all Counter Fraud personnel throughout the government who labor diligently to safeguard public finances.

We are supporting your expertise with a £1 billion investment aimed at enhancing the prevention and recovery of fraud losses in welfare, tax, and COVID Business Loans, as well as prosecuting those who have exploited the public purse. This is no easy feat, as fraudsters are incredibly innovative.

Nonetheless, we are employing cutting-edge tools and leading expertise to tackle crime, and fraudsters should be aware that we are pursuing them.

The Public Sector Fraud Authority has already begun collaborating with frontline teams. It is providing support to departments conducting Initial Fraud Impact Assessments to incorporate fraud considerations early in the design of new initiatives. Furthermore, it is developing and deploying new technology and tools and establishing an enforcement service to hunt down and penalize fraudsters.

A prime example of this is the recently secured contract with data analytics experts Quantexa. This will significantly enhance our counter-fraud data analytics capabilities and is part of broader efforts to leverage the opportunities presented by science and technology, including the establishment of a new government department, the Department for Science, Innovation and Technology, dedicated to harnessing these advancements.

The PSFA, established last August, is already making a difference. The ongoing efforts of the National Fraud Initiative reported record results, totaling £443 million detected or prevented across the UK from April 2020 to March 2022. However, this new approach is already yielding results.

Last autumn, the PSFA swiftly deployed a Tiger Team of counter-fraud specialists into BEIS to assess the fraud risks within new energy schemes, leading to better-protected initiatives — fighting fraud by design.

Those gathered here today are aware that the United Kingdom has a rich history of global collaboration, and it has never been more crucial to stand in solidarity with our closest allies on the world stage.

In the battle against public sector fraud, the UK holds an outstanding international reputation through its leadership of the International Public Sector Fraud Forum. This forum collaborates closely with our Five-Eyes partners to identify fraud risks, provide threat insights, and promote exemplary counter-fraud practices.

From this collaboration, we understand that the challenging fraud issues we face in the UK are not isolated. Unfortunately, international crime organizations readily operate across borders, and increased risks stem from an increasingly digital economy, such as ransomware — a topic that dominated ministerial discussions I had in Singapore in October.

This is why I am thrilled to announce today a new strategic partnership between the PSFA and the Australian Commonwealth Fraud Prevention Centre — the foremost public sector fraud-fighting entity in Australia. Both of our nations encounter similar challenges, facing criminal groups that seek to undermine our public programs, and we share fundamental beliefs regarding the significance of fraud prevention, the use of data and analytics, and the imperative to build capacity.

The new partnership will unite the brightest minds in counter-fraud efforts, enabling us to combat fraud effectively. Over the coming years, we will collaborate on numerous projects to develop innovative counter-fraud tools, deepen our understanding of public sector fraud, and establish world-leading standards.

This new alliance is a vital strategy for enhancing skills and capabilities within the public sector. Cultivating these skills is crucial for the Government to stimulate economic growth, which is one of the Prime Minister’s top five priorities.

I am pleased to share that the first cohort of senior leaders, including representatives from the Australian Commonwealth Fraud Prevention Centre, has completed the initial module of the Counter Fraud Leadership Programme in collaboration with Coventry University.

This program is a fundamental aspect of our plan to transform and modernize the public sector’s response to fraud. It ensures that those at the helm possess the expert knowledge and skills necessary to do so.

Significant progress has already been made to ensure the government is evolving alongside the times, including the £1 billion investment, which is merely the starting point for how we shape our response to emerging fraud threats.

Before I hand you over to some engaging speakers today, I would like to pose a challenge to everyone in the room.

As you leave today, I want each of you to reflect on what we might be overlooking. There are many bright minds here, and you will hear from some of them shortly. However, we must consistently strive to think like those we endeavor to trap.

We should examine our public services and question ourselves: how could a criminal organization exploit this for their benefit? What are the vulnerabilities, and what processes are outdated? How do we keep unscrupulous hands out of the public treasury?

I know you are committed to accepting this challenge and enhancing your determination to discover better methods of protecting taxpayers’ hard-earned resources. I look forward to hearing more about your achievements when we gather again.