Fraud, Error and Debt Conference: Francis Maude speech
Francis Maude spoke on progress in eliminating fraud and error in government spending and managing debts owed to the government.
It바카라 사이트檚 a pleasure to be here to talk about the importance of tackling fraud, error and debt.
I sometimes describe myself as the minister responsible for the plumbing 바카라 사이트� the processes behind the scenes that enable government to function, whether it바카라 사이트檚 buying goods or services, running major projects or, in this instance, ensuring that taxpayers바카라 사이트� money is actually spent on all the things that it바카라 사이트檚 meant to be spent on.
It바카라 사이트檚 not pulse racing stuff, it doesn바카라 사이트檛 get the blood flowing more rapidly, but it really does matter, particularly in the current spending context.
As you know, 5 years ago Britain was in the midst of the deepest recession since the war, with one of the largest budget deficits of any major economy 바카라 사이트� a bigger budget deficit proportionally than Greece or Portugal or Spain or Ireland, all countries that faced a sovereign debt crisis.
We had to save money and so the Prime Minister gave me the task of cutting the cost of government. It was a crucial, central part of our long-term economic plan for the country.
In the past, most ministers who have held this job have tended to view the Cabinet Office as a stepping stone to higher office, but I was probably unusual in that this was the job I wanted, both in opposition and when we came into government.
In fact I think none of my 8 predecessors lasted more than 18 months in this job and I바카라 사이트檓 told I바카라 사이트檓 the longest serving Paymaster General since the 1880s.
Thanks to the support of some brilliant civil servants, together with people we brought in from the private sector, this consistent focus has meant we바카라 사이트檝e been able to establish much greater central oversight over common areas of spending and activity, which is a huge step toward making government more efficient and effective.
Efficiency and reform achievements
Five years ago, the size and cost of central government was growing unchecked.
Now we바카라 사이트檝e cut the size of the civil service like-for-like by 21%, which has allowed us to get out of almost 20% of our property holdings.
Five years ago, government didn바카라 사이트檛 even know who its largest suppliers were. I had to write to the chief executive of the ones we guessed were the biggest asking them to tell us how much business we did with them.
Now we바카라 사이트檝e saved billions by renegotiating some of our biggest and most expensive contracts, while we바카라 사이트檝e replaced others altogether with simpler and more cost-effective deals.
Five years ago, the phrase 바카라 사이트榞overnment IT바카라 사이트� was a byword for failure.
Now, with the likes of our award-winning web domain 바카라 사이트 and our digital by default services, we can genuinely claim to be a world leader in digital government. It바카라 사이트檚 no accident that in the last 6 months both the United States government and the Australian government have set up their own versions of the 바카라 사이트 Digital Service, explicitly modelled on ours.
Consequently, last year we were able to save 拢14.3 billion compared with the final year of the previous administration.
In other cases 바카라 사이트� from shared back office services to improving commissioning skills 바카라 사이트� we바카라 사이트檝e sowed seeds that will take time to germinate, but will help us achieve greater savings in the future.
But while there바카라 사이트檚 much of which we can be proud, we바카라 사이트檝e only really just begun.
In many areas we started from a very low base, and the one area where we perhaps have the most work ahead of us is in tackling fraud, error and debt.
The situation in 2010
Five years ago, central government had only just begun to estimate fraud losses at 拢17 billion a year and had no accurate estimate of overall error losses or the balance of uncollected government debt.
There was little in the way or accountability or oversight. There was no clear approach to collecting data from across different parts of the public sector.
Nor was there a clear strategy for reducing losses. 바카라 사이트 was constantly on the back foot; scrambling to react only once the money was out the door, which in most cases was too late.
We knew that some areas of spending were subject to huge losses and lacked proper anti-fraud provisions, such as tax credits where almost 9% of entitlement was being paid out fraudulently or in error. But in other areas we had very little understanding of the problem.
Fundamentally, departments just didn바카라 사이트檛 work together to find shared solutions to what were often common shared problems.
It was almost as if government didn바카라 사이트檛 care, which is outrageous and not correct, although that was the impression that was given. We바카라 사이트檙e not just talking about numbers on a spreadsheet on a computer somewhere in Whitehall. We바카라 사이트檙e talking about taxpayers바카라 사이트� money 바카라 사이트� folding money 바카라 사이트� that people have worked hard to earn, and that바카라 사이트檚 been taken out of their pay in order to fund the services they rely on, not to be frittered away with casual disregard.
Progress on fraud and error in this Parliament
So we weren바카라 사이트檛 prepared to let it continue in that way.
So over the past 5 years we바카라 사이트檝e worked to put in place the mechanisms needed to get a grip on fraud, error, debt 바카라 사이트� the basic processes and structures that were previously so conspicuous by their absence.
One of the first things we did upon coming to office in 2010 was to establish the Fraud, Error and Debt Taskforce.
It brought ministers and senior officials from relevant departments, together with private sector experts, into a single decision-making body.
We also nominated an accountable individual on the board of every department, together with Counter Fraud Champions across government.
They바카라 사이트檙e all tasked with instilling an anti-fraud culture in their organisations, measuring and reporting the figures, and undertaking risk assessment to ensure policies and programmes are watertight.
When one government department identifies fraudulent activity, details are now shared with a central intelligence body, housed at the National Fraud Intelligence Bureau. They analyse the information, match it to information held on other frauds and issue alerts to help protect other organisations.
We also established common recording and reporting mechanisms. For the first time, it바카라 사이트檚 now possible to compare like-for-like data from across different parts of government. As a result, we know far more about what the problems are and also about where we lack insight, which is one of the reasons why we바카라 사이트檝e introduced random sampling exercises.
Departmental efforts
As we바카라 사이트檝e worked to create this greater oversight from the centre, departments have been taking steps to reduce fraud and error in their own areas of responsibility.
HM Revenue & Customs and the Department for Work and Pensions have been working to reduce fraud and error both in the legacy benefits system and as part of the roll-out of Universal Credit.
A major part of this is the introduction of the Real Time Information System. If someone in receipt of benefits starts to receive earnings or a pension from an employer, we will be able to know that almost immediately. Increasingly, it will mean we can quickly contact them to help them understand the impact on their benefits, reducing the potential for fraud or mistakes and for people to build up debt through overpayment.
Any MP who was there when tax credits were introduced will remember the misery of constituents coming to see us, saying 바카라 사이트淚바카라 사이트檝e just had this letter from the revenue which says I owe them 拢4,000 and I바카라 사이트檝e got to pay it by next week바카라 사이트�. These were not people who for the most part who were deliberately trying to swindle the system 바카라 사이트� it was complicated and maybe they didn바카라 사이트檛 send the right notification and sometimes it was error on our side. But the stress and the misery caused to these hard-working low-paid people was really unforgivable. But with real time information we can prevent that because we can let people know and stop the debt building up.
Progress on debt
So we바카라 사이트檝e also made progress in tackling debt holistically.
Debt is always going to be a sensitive issue and it바카라 사이트檚 right that we are sympathetic to genuine cases of hardship, which is why our approach is based on prevention and fairness as well as efficiency.
But debt owed to the government currently stands at over 拢22 billion, we can바카라 사이트檛 and shouldn바카라 사이트檛 avoid tackling it.
In December last year, we announced the introduction of the Debt Market Integrator.
Starting from this year, a new company 바카라 사이트� Integrated Debt Services Limited 바카라 사이트� jointly owned by the government and a private sector partner, a company we have brought into existence, will provide a single point of access to a wide range of debt management and collection services.
바카라 사이트 has always made use of private debt collection firms, but this new company offers a co-ordinated approach so that government can buy services as a single customer, which means less cost and less hassle for all concerned.
It also enables us to deal with individuals in a more differentiated way. People who can pay but won바카라 사이트檛 pay should be pursued and we will do that more effectively through one agency. But people who genuinely can바카라 사이트檛 pay have in the past suffered the stress of having multiple agencies and parts of government, approaching them in different ways. We need to do this in a much more holistic and humane way, without being too hard on those who genuinely can바카라 사이트檛 pay, but at the same time being more effective at getting the money out of people who can pay but won바카라 사이트檛, and who will often play off the various parts of the system against each other.
Next steps
So fraud, error and debt are now firmly on the government바카라 사이트檚 agenda, where they should be, and public money is being treated with the kind of respect and care that people expect and deserve.
But where we바카라 사이트檝e made progress, it바카라 사이트檚 taken far too long and we바카라 사이트檝e still only scratched the surface of what needs to be done.
We need to do much better. There needs to be better risk assessment. Better loss measurement. Better detection. Better prevention. Better co-operation. Better sharing of intelligence.
Culture and skills in the civil service
The new Chief Executive of the Civil Service, John Manzoni, will help steer the development of a more professional approach.
Central to this is building the necessary skills, which is why we바카라 사이트檝e introduced training for civil servants on fraud awareness. To date over 250,000 civil servants 바카라 사이트� well over half the workforce 바카라 사이트� have completed this course.
We are using this to promote a culture of 바카라 사이트榗heck first, pay later바카라 사이트� and the message to public servants is clear:
You shouldn바카라 사이트檛 be spending taxpayers바카라 사이트� money without being completely satisfied that it바카라 사이트檚 not being paid fraudulently or in error. And if you spot fraudulent activity, then stop it immediately. Don바카라 사이트檛 just watch and wait until you think you have enough evidence to prosecute.
On top of general awareness, we will also help those who specialise in counter fraud or error reduction by providing clear standards, guidance and support; this is to increase professionalisation of how we do this.
Ultimately, the fastest and most effective way of tackling fraud, error and debt is to bring it out in the open. Discovering fraud and error needs to be considered a good thing, rather than a source of embarrassment or risk, because once you know about it you can start putting it right. This is a much broader concern than just in fraud. A strong organisation is confident about accepting when things haven바카라 사이트檛 gone well, because that is the essential condition for resolving it.
Internal fraud
This includes taking a strong approach to any internal fraud within the public sector.
It바카라 사이트檚 a difficult subject. The majority of fraud and error is external to government and most public servants are hardworking, trustworthy and motivated by the desire to help other people.
But we can바카라 사이트檛 shy away from the issue.
You may have read about the recent high profile case of a city fund manager who became 바카라 사이트� I quote 바카라 사이트� 바카라 사이트淏ritain바카라 사이트檚 biggest fare dodger바카라 사이트� for avoiding thousands of pounds of train fares by exploiting a loophole with his Oyster card.
The Financial Conduct Authority consequently banned him from performing any role in the financial services sector for falling below the standards expected.
That바카라 사이트檚 a robust response and we should take the same approach.
In the past it has proved difficult to bring all investigations to a satisfactory conclusion. This is something that I know our own fraud investigators feel strongly about.
So I can announce today that in future we will take a zero tolerance approach. No investigation will be stopped without the agreement of the permanent secretary; people will be investigated and brought to account even if they resign or move jobs.
We바카라 사이트檒l also develop a central register of individuals who바카라 사이트檝e had sanctions taken against them for fraud or dishonesty and I have asked officials to ensure those dismissed for fraud will be barred from returning to work anywhere in the public sector for a period of five years.
We바카라 사이트檙e sending out a clear message: If you바카라 사이트檙e a public servant and defraud the taxpayer or your employer, you will face the consequences. We are determined to protect the interests of the public 바카라 사이트� and, for that matter, the good name of the civil service and public servants as a whole. It is wrong that the vast majority of honest hard-working public servants should be sullied by the sense that there aren바카라 사이트檛 consequences for the few individuals who transgress.
Grants
We also need to look more closely at the money government pays out each year through grants 바카라 사이트� which last year totalled 拢139 billion.
It바카라 사이트檚 clear from our research that the system we inherited lacked rigour and we are taking action to address this.
Lack of rigour inevitably masks inefficiencies and leaves grant making open to fraud and error. In fact, we estimate 바카라 사이트� and it바카라 사이트檚 a conservative estimate 바카라 사이트� that 1% of grant money is lost in this way.
Just because government pays this money through intermediaries doesn바카라 사이트檛 absolve it of responsibility. Every penny of taxpayers바카라 사이트� money matters.
So we바카라 사이트檙e putting in place a consistent cross-government approach to ensure grants are managed with the same discipline as you바카라 사이트檇 expect for any other kind of financial or commercial activity.
We바카라 사이트檙e currently setting standards, designing training and establishing the tools to enable civil servants to keep track of grants through every step of the process, ensuring money is paid to the right people and that they deliver what they바카라 사이트檝e been paid to do.
It바카라 사이트檚 also our ambition to streamline how grants are administered, for instance by introducing a single website for all grant applications, by sharing payment services and making more use of digital technology.
Counter Fraud Checking Service
So I바카라 사이트檝e outlined some of the ways we must increase our efforts. But as with so many areas, we have to recognise that government doesn바카라 사이트檛 have all the answers.
Plenty of other organisations have considerable experience dealing with fraud and error and there바카라 사이트檚 a huge amount we can do to learn from each other and support one another.
So we must continue our work to design a Counter Fraud Checking Service.
The idea is not a complex one. We want to bring together information on known frauds from banks, insurance companies and government, to help public and private sector organisations make better informed decisions on the eligibility of applicants.
To date we바카라 사이트檝e undertaken 3 exercises with partners, and each one has taught us more about the differing nature of fraud, and the different responses from each sector. We are using this data to help inform our business case.
What these exercises have proved beyond any doubt is that government and private sector firms are often defrauded by the very same people.
Fraudsters do not confine their activities to convenient organisational boundaries, and nor should we. For too long our defences have been fragmented.
This work is complex, and it takes time, but my message today is that government is committed to working with the private sector to develop a really strong united front. So please keep working with us, because the closer we co-operate and the more intelligence we share, the better our anti-fraud measures will be.
And another very welcome development over the last year, which is coming to fruition, is forging a single integrated internal audit service for central government. This will both strengthen it and make it more consistent. I was surprised to find that internal in this context was held to mean internal to the department, but it shouldn바카라 사이트檛 be, it needs to be internal to the government. A single integrated service will add strongly to our effectiveness in assessing the risk much more holistically and helping to drive out fraud and error.
Conclusion
In conclusion, public spending restraint isn바카라 사이트檛 going to disappear any time soon and the public sector must continue to deliver more and better services for less money.
Every penny counts, which is why tackling losses to fraud, error and uncollected debt is absolutely crucial.
Our work over the past few years has established the oversight and structures to help us do this and there are already some pockets of good practice. But this is a start and we바카라 사이트檝e not gone nearly fast or far enough.
We should be tackling fraud, error and debt as a matter of course, not just because ministers suddenly demand it; and departments should be working together by default rather than by exception.
As one civil servant who works as a recently put it: 바카라 사이트淚t바카라 사이트檚 not glamorous but I feel we do a necessary job that ensures benefits, wherever possible, are given to those that need it.바카라 사이트�
He바카라 사이트檚 right 바카라 사이트� it바카라 사이트檚 about ensuring public money gets where it바카라 사이트檚 needed most. Spending people바카라 사이트檚 money with the same care and consideration as we would our own.
There바카라 사이트檚 a great deal of work ahead of us 바카라 사이트� but it really does matter. So thank you to all of you, very sincerely, engaged in this great work.