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A New Day, A New Government, A New Fraud Strategy

5 July 2024

As the dust settles on an eventful election campaign and newly appointed Ministers find their feet, it's only right that we should ask what next for fraud policy under the new Labour government.

If the 2010s were something of a ‘lost decade for the counter-fraud community, then the 2020s were the rebounder with the publication of the UK’s first ever Fraud Strategy in 2023. A little over a year later we have a commitment to a second one; the Labour Party’s manifesto promising to introduce “a new expanded fraud strategy to tackle the full range of threats, including online, public sector and serious fraud. We will work with technology platforms to stop their platforms being exploited by fraudsters”.

While the cynics among us may be tempted to say that another strategy will be little more than a paper-based exercise with little impact outside Whitehall, this high-level political commitment is something the counter-fraud community should welcome.

First, there are those that would argue that we’ve not actually had a national Fraud Strategy, but a consumer Fraud Strategy, given the lack of focus on fraud against business. The University of Portsmouth’s Annual Fraud Indicator 2023 estimated that around £150bn in fraud is committed against the private sector each year. It is therefore encouraging that the new government has committed to expanding policy in this area.

Second, despite some encouraging initiatives with social media and technology platforms in the Online Fraud Charter, it is still far from clear what these would even deliver in practice. There are encouraging signs that the new government intends to do more in this space, with commitments to building in both carrots and sticks into the relationship with the tech sector.

Third, there is a very specific focus on the need to get a grip on the scale of fraud against the public sector. In opposition, Labour committed to introducing an offence of ‘fraud against the public purse’ and to introducing a ‘Covid Corruption Commissioner’ to tackle procurement fraud and recoup lost government grants. With the cost of public sector fraud running to up to £40bn – dialling up investment in this area could reap significant rewards.

These are encouraging signs of new pace and ambition for fraud policy in the UK. But beyond these, where are the gaps that the incoming government needs to fill? A good starting point is the Cifas Fraud Pledges 2024, launched in May of this year. Specifically, there are three things the new government should do to really shift the dial in the fight against fraud.

1) Give fraud and economic crime the leadership and prominence they need and deserve. The government could do this by creating a Minister for Economic Crime, reporting directly into the Prime Minister with responsibility for driving change and coherence across the system. With policy responsibility split across numerous government departments, without institutional change the response risks remaining sclerotic.

2) It is essential that the UK looks again at the policing and enforcement landscape for fraud and economic crime. Recent investment at the regional tier of policing in ‘Proactive Economic Crime Teams’ have set the scene for a more dynamic, intelligence-led response. Operational successes like Operation Elaborate and Operation Stargrew demonstrate new ways forward for attacking the enablers of at-scale ‘crime-as-a-service’ outfits. Building on this, the new government must avoid the reflex of disrupting progress by opting for institutional change. Instead, it should capitalise on recent success by reframing ambition in fraud policing (focussing on strategic disruption rather than simply arrests and prosecutions) as well as providing a more coherent, long-term police funding model.

3) Finally, it is important that the new government doesn’t throw out the baby with the bathwater. The previous government made some progress introducing changes and policies that need to be embedded and driven forward. Not least the commitment to deliver an Economic Crime Data Strategy to properly harness the data within the eco-system and better drive strategic interventions and volume disruption.

Of course, all this will take time – and money. If the new government wants an immediate quick win, requiring minimal funding and no new machinery of government or legislative changes, it could do worse than implementing the Cifas Fraud Pledges' recommendation to make child financial harms education compulsory in the KS3/4 curriculum. With teaching assets already created by Cifas and UK Finance and with backing from our partners in the Child Financial Harms Consortium  this would be a low cost way of showing the counter-fraud community that the new government means business.

In summary, the announcements made by Labour in opposition give hope that the new government is committed to maintaining the upwards trajectory of fraud as a political priority. But, there is the thorny issue of the ‘known unknowns’: what the new strategy will continue and what will be jettisoned. Now though, it is for the counter-fraud community to come together to shape the next generation of change.

There is good reason to be optimistic that the pace of change in the last few years will not be upended. On the contrary, there is every reason to suggest this pace will not only continue but will go further and faster.

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Posted by: Helena Wood

Head of Public Policy at Cifas 

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Posted by: Helena Wood

Head of Public Policy at Cifas 

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