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Fraud costs each UK adult £765 per year

27 January 2011

New police figures estimate that fraud costs the UK economy around £38bn a year, more than half of which is borne by the public sector.

The National Fraud Authority (NFA) equates this to a cost of £765 per year for every UK adult. The private sector is thought to have lost £12bn through fraud, charities £1.3bn and individuals £4bn.

The organisation’s Bernard Herdan said all areas of society should play their part in tackling the "rising tide" of fraud, including sharing evidence of suspicious behaviour with the authorities.

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

Despite such warnings, the report makes clear that fraud remains a small proportion of total spending and that some of the year-on-year growth in fraud was partly due to more comprehensive reporting, particularly in the public sector.

The scale of public sector fraud reflected better reporting procedures, said the researchers, who added that it remained a relatively small proportion of total spending.

Cabinet Office minister Francis Maude commented: "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."


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