Government could avoid millions lost in overpayments

9 June 2011

9 June 2011 | Lindsay Clark

The UK government believes it could save £264 million lost in overpayments to suppliers if a pilot scheme is rolled out across Whitehall.

A report released by the Cabinet Office said that the Department for Transport (DfT) had saved £500,000 by identifying losses from payments made to suppliers. The DfT commissioned a data analytics company to undertake an audit of their group procure-to-pay systems to detect and recover overpayments. 

The Home Office undertook the same exercise and detected £4 million in overpayments. “With government spending £66 billion on procurement in 2009/10, applying these techniques across all departments could identify and recover £264 million on just one year of spending,” said the interim report from the Cabinet Office Counter Fraud Taskforce.

The data analytics company is working to recover the DfT overpayments on a payment-by-results basis, the Cabinet Office said. It expects to identify and recover up to £8 million once it has analysed six years of payments to suppliers made from across the entire DfT family.

The Cabinet Office report drew from the AnnualFraud Indicator 2011, published by the National Fraud Authority, which showed procurement fraud in central government reached £1.5 billion. Across local government the figure was £855 million.

Cabinet Office minister Francis Maude said: “We will no longer allow a culture of ignoring or accepting fraud. It is time to turn the tide on fraudsters and stop government being seen as a soft touch by criminals. Every pound defrauded from the government means that there is less to spend on frontline services like healthcare, education, policing and defence.

“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,” Maude said.

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