The plans were announced by Baroness Hanham and Lord Wallace of Saltaire on 15 July 2013.
The announcement was made in Parliament, during the report stage of the Local Audit and Accountability Bill. The minister confirmed the Cabinet Office will now assume responsibility for the National Fraud Initiative from the Audit Commission at the appropriate time once legislation is in place.
The closure of the Audit Commission, announced in the Queen’s speech, will save taxpayers up to £1.2 billion, introduce better local auditing of public bodies and increase council accountability to the electorate.
The National Fraud Initiative will become part of the Efficiency and Reform Group - a joint Cabinet Office and Treasury initiative which has led an ambitious programme to drive savings throughout the civil service to make every taxpayer pound count.
Since its creation in 1996, the National Fraud Initiative has identified over £1 billion of fraud, overpayment and error. The initiative detects potential fraud by matching electronic data sets within and between public and private sector bodies. This includes police authorities, local probation boards, fire and rescue authorities as well as local councils and a number of private sector bodies.
The National Fraud Initiative move to the Cabinet Office will allow the National Fraud Initiative to continue and develop its existing work in line with government activities to tackle fraud, error and debt. The programme will become part of the Fraud Error and Debt Taskforce which provides oversight of cross-government initiatives to save taxpayers’ money through tackling fraud and error and improving debt recovery across government. Fraud, error and debt initiatives across government saved £3.5 billion in 2011 to 2012 and aim to save an estimated further £22.4 billion in total by the end of 2014 to 2015.
Minister for Cabinet Office Francis Maude said:
Hard working people expect government to do everything it can to protect the money they pay in taxes. But for years government did all too little to tackle the £37 billion of taxpayers’ money lost every year through fraud, error and uncollected debt.
Our work to clamp down on wasteful spend has saved £10 billion last year alone. To win the global race we need to make every penny count so we are pushing ahead with our efforts to tackle fraud.
Government is now, for the first time, working as one to catch the cheats. Bringing the National Fraud Initiative into the Cabinet Office’s Efficiency and Reform Group will complement the work of our Fraud Error and Debt team which has already helped save £3.6 billion in 2011 to 2012.
Local Government Minister Baroness Hanham said:
Fraud costs this country more than £73 billion a year and it is essential we do everything we can to prevent fraud from happening, but also to recover lost money and pursue fraudsters in court. I am delighted the highly successful National Fraud Initiative will become part of Cabinet Office where it will no doubt become an invaluable part of the government’s fight to tackle, prevent and detect fraud.
Notes to editors
The Audit Commission’s National Fraud Initiative matches data from 1,300 public sector and 77 private sector organisations, including audit bodies in Scotland, Wales and Northern Ireland, government departments and other agencies. It flags up inconsistencies in the information that indicate that a fraud, an error or an overpayment may have taken place; signalling the need for review and potential investigation.
Savings of up to £1.2 billion from the abolition of the Audit Commission are over a 10 year period and include savings made by local authorities on external audit fees. An impact asssessment quantifies the net savings associated with the government’s programme of reforms to local audit set out in the bill.