The roll-out of electronic services will provide government
agencies with new techniques to combat benefit, social security and
tax fraud, according to the National Audit
Office.
Peter Lilly, audit manager at the NAO, said the roll-out of online
services would present departments with new opportunities to check
for fraudulent claims electronically. "When designing online
services, there are opportunities for departments to build in
processes to carry out checks on those transactions to identify
patterns," he said.
Fraud costs government departments billions of pounds a year.
Customs and Excise loses about £12bn a year through VAT fraud and
errors, and prescription, optical and dental fraud cost the NHS
£100m a year.
Data matching is already being used by several government
departments to identify fraud, and this is likely to be extended in
the future, said Lilly. For example. Customs exchanges information
with the Inland Revenue to identify businesses that have
disappeared into the shadow economy and are not registering
VAT.
"The next stage of development must be to bring data matching into
the process as a matter of course, but departments will need to
make sure they are complying with the Data Protection Act," said
Lilly.
This could be accompanied by increased data sharing between
government departments and private sector bodies to identify
potential fraud. "Collaboration does take place, but it is not as
extensive as people might wish. There is collaboration on money
laundering. It could be that more collaboration with the private
sector takes place in future," said Lilly.