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Fraud costs each person £765 a year

27 January 2011

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The UK taxpayer pays out an average £765 a year for goods and services because of fraud, official figures have disclosed.

The National Fraud Authority said the equivalent of £38bn is stolen each year.

The public sector alone was cheated out of £21bn, while the private sector lost £12bn, individuals £4bn and charities £1.3bn.

Frauds ranged from marketing scams to bogus operators.

Broken down to a theoretical individual price, the fraud costs every adult £765.

The second Annual Fraud Indicator said the total cost of fraud has increased by around £8bn from last year.

Researchers insisted that the size of public sector fraud reflects better reporting procedures and remains a relatively small proportion of total spending.

Bernard Herdan, who works at the fraud organisation, said the research was a blueprint for work to tackle the “rising tide” of fraud.

He said everyone can play a part in protecting themselves from fraud and sharing information on suspicious behaviour with the authorities.

Dr Herdan said: “We want to develop a stronger counter-fraud culture, which helps to disrupt fraudulent activity across the UK and globally.”

Cabinet Office minister Francis Maude said the £21bn cost of public sector fraud could pay for 800 secondary schools or 615,000 nurses.

He said: “Contrary to what many people think, fraud and error is not just confined to benefits and revenue. It affects every government department and impacts on the government’s ability to deliver better public services, while stripping the civil service of vital resources. We can’t and won’t allow this to happen any more.”

Copyright © Press Association 2011

National Fraud Authority