UK losing £219bn to fraud each year, Crowe finds

Fraud is costing organisations and individuals in the UK £219bn each year, according to new research published by Crowe in conjunction with specialist fraud lawyers Peters and Peters and the University of Portsmouth’s Centre for Cybercrime and Economic Crime.

It estimated that private sector fraud costs the UK economy £157.8bn, an increase from the £140bn reported in 2017 and remains the sector of the economy which loses the largest amount to fraud. 

Procurement fraud represents a large proportion of private sector fraud (£133.6bn). Given the vast amounts spent on procurement activities, even a low fraud rate would lead to sizable losses, the firm said. 

Meanwhile, public sector fraud stands at an estimated £50.2bn for 2021, compared with £40.3bn for 2017, an increase of approximately 25%. 

With rising government spending throughout and as a result of the pandemic, procurement fraud is again responsible for the biggest uptick (an increase of £4.4bn) alongside tax fraud (an increase of £1.94bn).

Fraud committed directly against individuals has also climbed from £6.8bn to £8.3bn over the same period.  

Jim Gee, forensic and counter-fraud specialist at Crowe, said: “Unless our country is clear about the cost of fraud, it cannot prioritise and coordinate a response, particularly as other problems clamour for resources. The numbers are staggering and companies, public sector organisations and individuals are all suffering at a time they can least afford to. 

“The sums are stark, but can be hard to grasp. In the UK alone, the amount lost to fraud is higher than the Government’s Health expenditure. It is three times the cost of the furlough scheme and it even outweighs the wealth of Elon Musk.”

He added: “A figure of £219bn simply cannot be ignored. The time has come for a carefully planned, professional and strategic effort to tackle this problem.”

Jonathan Tickner, head of fraud and civil disputes at Peters and Peters, said: “Where there is large-scale fraud, there is the potential for large-scale recovery of the stolen sums. There is a real opportunity to zero in on the growing burden of procurement fraud, potentially delivering very large sums to fund government commitments over the years ahead.”