Treasury Fraud Reports


Comment on and evidence from

Public Concern at Work submission
Oral evidence will be given on June 15th to the

Committee on Standards in Public Life on
"Getting the Balance Right"

Addendum on effect of The Public Interest Disclosure Act on public sector culture

  95/96 96/97 97/98 99/99 99/00 00/01 01/02 02/031
No. of cases
of Whitehall
fraud found		 480 626 639 580 566 539 597 898
No. which were
discovered by
whistleblowing		 153 169 181 195 214 188 231 426
% of frauds
found that
were found by
whistleblowing		 32% 27% 28% 34% 38% 34% 39% 47%
Value of all
Whitehall
frauds found		 £2.8m £2.1m £1.9m £3.0m £2.0m £1.6m £1.4m £4.3m2
Value of those
discovered by
whistleblowing		 £0.68m £0.22m £0.85m £0.64m £0.88m £0.66m £0.30m £0.52m

In the five years after enactment of the Public Interest Disclosure Act (1998-2003) over £12 million of public sector fraud has been officially reported to the Treasury. Over £3 million of this had escaped normal controls and was only stopped by 1,250 Whitehall whistleblowers. These official figures show there has been a 31% increase in the number of frauds stopped by whistleblowers since the legislation was passed.

Taking account of (a) the fact that all of these frauds would have continued but for the whistleblowing and (b) its deterrent effect 3, we estimate the whistleblowing law is already saving tax-payers over £2.5 million a year 4 in combating fraud. If - as we recommend in our submission - employers, regulators and government better promote whistleblowing across the public sector, we would expect that the savings will be substantially greater.

Public Concern at Work

  1. Please note that the Treasury slightly altered the definition of categories in the 2002/03 report.
  2. This includes one fraud of £2.7 million discovered when a supplier complained of non-payment.
  3. If the exceptional item in note 2 is excluded, then the average value of frauds reported annually fell from £2.26 million before PIDA to £1.92 million after. With HM Treasury concluding in its most recent Report that "the main means of discovery was via reporting procedures demonstrating the value of well-advertised avenues for staff to report their suspicions of fraud", we consider this data is evidence of the deterrent effect of the promotion of whistleblowing avenues and of the legislation itself.
  4. This estimate is based on our own - we believe modest - assumptions that (a) all these frauds would have lasted for 12 months and then been discovered and stopped by normal or new controls (so saving £1.2 million a year), and (b) the promotion of whistleblowing and of its role in stopping each of these frauds would have deterred at least an equal number of other, similar-sized frauds which would have lasted as long and cost the tax-payer as much (at least a further £1.2 million a year).