The UK’s Public Sector Fraud Authority (PSFA) has published a 2023-2024 ‘delivery plan’, with one of four priority workstreams being to make better use of technology to ‘find, stop and recover’ fraud.

The PSFA was set up last year as part of the Cabinet Office and HM Treasury. It has budget from April 2023 to March 2024 of £12.7m (about $16.4m) to help UK authorities fight what they estimate to be at least £33.2bn ($42.8bn) of fraud (and error) against the public purse every year.

In its 2023/24 plan the PSFA specifies 27 objectives to improve ‘capability and performance’ in finding and cutting fraud against the public sector, with the first being to achieve a (pre-existing) target of delivering £185m in audited benefits.

The 13-page document’s publication comes almost four months after a National Audit Office (NAO) report (‘Tackling Fraud and Corruption Against Government’) described the PSFA’s creation as ‘presenting the opportunity for a renewed focus on fraud and corruption’ against a backdrop where ‘most public bodies cannot demonstrate that they have counter-fraud resources commensurate with the risk.’

The PSFA ‘will need to be influential across government if it is to achieve the required changes in culture, preventive approach and robust assessment of risks’, the NAO report warned.

RELATED ARTICLE Protecting the public purse: tackling fraud, error and debt – write-up of a breakout session at the Global Government Fintech Lab 2023 (held in Dublin, Ireland, on 18 May 2023)

Making the most of tech and data

The explicitly tech-focused workstream, which is equally about capitalising on digital data, contains four commitments.

First, the PSFA states that it will create and deploy a ‘Single Network Analytics Platform’, onboarding three public bodies and creating five ‘test models’.

Global Government Fintech reported almost six months ago that the PSFA had awarded a contract worth more than £3m (more than $3.7m) to Quantexa to use ‘new data and cutting-edge technology, including artificial intelligence (AI), to find and prevent more fraud across the public sector’ (according to an announcement issued at the time by the London-headquartered company). The contract award notice for Quantexa’s assignment described its remit as being the ‘provision of a Single Network Analytics Platform for cross-government/and UK banking sector use’; and that the company’s £3.2m contract would run to 2 January 2026.

Second, the PSFA states that it will ‘deliver counter-fraud analytics services to public bodies through the National Fraud Initiative (NFI) and C-19 [Covid-19] Loans Support Service’. The NFI seeks to match electronic data within and between public and private sector bodies.

Third, the PSFA commits to ‘design and launch a new intelligence model to help public bodies access and develop intelligence on fraud’.

Fourth, it plans to start eight new ‘data-sharing pilots’ capitalising on the Digital Economy Act (DEA), which became law six years ago.

RELATED ARTICLE UK’s Public Sector Fraud Authority turns to ‘cutting-edge’ tech – our article (30 January 2023) on the appointment of Quantexa

Counter-fraud priorities

The government announced details of the PSFA last August. Its budget for 2022/2023 was £11.3m.

The authority is led by Mark Cheeseman OBE, who was confirmed in the role in May 2023 (he already held the role on an interim basis). Cheeseman led the creation of the UK’s ‘Counter Fraud Profession’ and set-up for the UK of the International Public Sector Fraud Forum – a collaboration with Australia, Canada, New Zealand and the US.

The three not-explicitly-tech-related workstreams in the 23/24 plan are to: ‘get more fraud expertise in up front and make a step change in how government prevents fraud’; ‘take more, and better, action where fraud occurs’; and ‘resolutely focus on performance and outcomes’.

These overall priorities are supported by a further (fifth) workstream: to ‘strengthen key building blocks for counter-fraud work across government’.

The Cabinet Office has previously worked with Quantexa to help detect fraud in Covid-19 loan schemes, specifically the Bounce Back Loan Scheme, on a one-year contract worth £362,280 (about $466,000). The company also had a separate contract, titled ‘Fraud Network Analytics and Entity Resolution (Covid-19 Loan Schemes)’ – worth £540,000 and running from March 2022 to March 2023 – according to the government’s contract award notice website.

Tooling up to fight fraud

Other tech-based solutions to tackle fraud used by the UK government include ‘Spotlight’, an online automated due-diligence tool that ‘highlights areas of risk to inform grant-making decisions’.

Euan Slack, who is responsible for the development and adoption of digital tools within the Cabinet Office’s Government Grants Management Function, spoke about the evolution of the tool, and also the challenges facing the public sector when it comes to tackling fraud, at the Global Government Fintech Lab 2023 on 18 May.

The tool (which Slack also discussed at the Global Government Fintech Lab 2022) is built ‘by the government for the government’ and is operating on a ‘software-as-a-service’ model, he explained.

“Based on the cloud, we build [government] departments’ accounts within that and then license it out,” he said at the 2023 event, adding that it “touches on fintech and hopefully puts the government in a position to harness it”.

Slack said that recovered funds “will be tiny compared to the amount that has gone out”, referring to high levels of fraud in Covid-19 help schemes.

FURTHER READING

‘Acceleration under pressure: governments tackle fraud with fintech’ – our report on a session at last year’s Global Government Fintech Lab (held in Estonia on 1 June 2022) that examined how governments are using fintech solutions to address fraud, error and debt (the panel included Euan Slack and a representative from Quantexa)

‘Governments turn to fintech in fight against financial fraud’ – a report on our ‘How can fintech solutions help governments tackle fraud, error and debt?’ webinar held on 16 November 2021

‘UK Cabinet Office enlists fintech company in Covid-19 fraud battle’ – our news story (2 November 2021) on Quantexa’s appointment to help the UK government detect fraud in Covid-19 loan