The new fraud strategy from the government is a welcome recognition that fraud is a significant problem facing the country, but the details suggest the Government does not fully appreciate the scale of the task ahead, argues Richard Hyde.
The new fraud strategy from the government is a welcome recognition that fraud – the most common crime that people experience – is a significant problem facing the country. The proposal for a national fraud squad with 400 new police and expert counter-fraud staff (partially under the auspices of the National Crime Agency – NCA) is a step in the right direction. More people working to tackle the issue is a good thing. So too is the link with the NCA, which can help join up the fight against fraud with the fight against organized and other economic crime.
However, it is clear that the Government is not appreciating fully the scale of the task before it. Fraud accounts for around four in ten of the crimes committed against households in England and Wales. The latest Crime Survey for England and Wales found there were 3.7 million fraud offences committed in 2022. Further, new data from the government shows that nearly one-in-five businesses were also a victim of fraud in 2020 – implying perhaps as many as a million businesses were affected. Estimates suggest fraud costs the country £137 billion a year.
The new resources are likely to prove too meagre to substantially reduce these costs, and improve in any significant way the appalling arrest rate of 0.1%. In England and Wales, currently less than 1% of policing resource is focused on fraud. In 2020-21, the City of London Police (the country’s lead force for dealing with fraud) for example had 173 officers and 175 staff dedicated to tackling fraud. They were able to take on 427 cases that year and obtained 98 convictions. With more than 340 officers and other staff, the City of London were only able to tackle somewhat over 400 cases a year. Therefore, the new national fraud squad may only mean another four or five hundred cases are dealt with annually. A mere drop in the ocean against the millions of incidents that needs to be investigated and the billions of pounds lost each year.
A more ambitious approach is needed. One that matches resourcing to the scale of the challenge. We have previously set out the case for a “systems approach” to significantly reduce fraud and the harm that it causes. This requires complementary reforms across ten areas:
- The collection of better data and improved analysis of the scale and nature of the problem.
- Strong political leadership and strategic drive from the centre.
- A thorough re-organisation of the structure of policing responsibilities.
- Investment in capacity and capability, including more skilled counter-fraud specialists and use of technology. For example, a more proportionate allocation of policing numbers across crime types would see 30,000 new officers and specialists working on fraud.
- A greater contribution from the private sector.
- A review of the legal framework to give the police and prosecutors the tools they need to be effective.
- Use of civil sanctions and other reforms of the criminal justice process to enhance the deterrents against fraud.
- More effort on the international front to make it easier to police fraud across borders.
- Changes to police funding to focus more financial resources on tackling crimes like fraud.
- Raising awareness among the public of the threat of fraud and a more balanced political debate around policing that recognizes the prevalence of fraud and its impacts.