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.