March 24, 2014 8:03 pm

NHS unable to put figure on fraud

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Britain’s health department does not know exactly how much money is lost to fraud each year in the NHS, it has emerged, after an investigation suggested that up to £7bn was disappearing through mistakes or criminal schemes.

Health officials said they “did not recognise” the £7bn figure, broadcast last night by the BBC, but were unable to come up with an alternative.

NHS Protect, the organisation that leads work to tackle fraud in the NHS, “has a multimillion pound annual budget and has recovered millions of pounds lost to fraud, bribery and corruption for the NHS”, the health department said.

Jim Gee, former director of NHS Counter Fraud Services, now with BDO, the professional services firm, told the FT he had came up with the £7bn calculation based on an analysis of international fraud data. “If the NHS is in line with the rest of the world, it would be losing around £7bn,” he said.

The government’s Annual Fraud Indicator based on estimates last year suggested only £229m was being lost. However, for the figure to be this low, Britain would have to do 30 times better at controlling fraud than the rest of the world, which was unlikely, Mr Gee suggested.

Mr Gee, who produced the report with the University of Portsmouth’s Centre for Counter Fraud Studies, called for legislation requiring losses to be published.

He cited the Improper Payments Information Act, passed in the US in 2002, which requires all public sector bodies over a certain size to measure losses to fraud and error every year and to publish the information, alongside plans to reduce them.

“The more we know about the nature and scale of the problem, the better we can apply a solution,” he said.

His report, published on Tuesday, concludes that globally fraud and error cost the healthcare sector around £313bn.

Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, which is taking over anti-fraud functions within the public services when the Audit Commission is abolished, complained that the funding for NHS Protect was shrinking.

“Cutting key anti-fraud functions is usually a false economy,” added Mr Whiteman.

Paul Briddock, of the Healthcare Financial Management Association, which represents NHS finance directors, queried the £7bn figure as “incredibly high”.

“£7bn is around seven per cent of the whole NHS budget and seems huge based on my experience”, he added

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