Public funds fraud cost taxpayers £81 billion

Fraud and error in public funds cost the taxpayer up to £81 billion last year, according to the latest data from the National Audit Office (NAO).

9 Dec 2024

Fraud and error in public funds cost the taxpayer up to £81 billion last year, according to the latest data from the National Audit Office (NAO).

However, the public spending watchdog warned that most of the potential loss goes undetected.

The NAO watchdog estimates that fraud and error cost the taxpayer between £55 billion and £81 billion in 2023/24.

The watchdog said that ‘significantly more fraud and error is estimated based on robust measurement, such as sample testing of benefit spending by the Department for Work and Pensions (DWP)’.

When it came to ‘estimated but not detected’ fraud, the NAO estimated that £30 billion was lost in tax revenue to HMRC, plus £1 billion of overpaid reliefs and benefits; £7 billion of overpaid benefits to the DWP; and £2 billion to other public bodies.

Jack Bower, Public Sector Audit and Assurance Manager at the Institute of Chartered Accountants in England and Wales (ICAEW), said: ‘The NAO report provides a stark reminder as to the level of fraud and error that is costing the taxpayer billions of pounds every year, money that could be spent on delivering vital public services and revitalising creaking infrastructure across the UK.’