Fraud cases across the UK have reduced by 50 per cent during the last year, but because of a slower decline, the public sector now accounts for 60 per cent of the total.
The findings come from a report by accountants BDO which analyses cases worth more than £50,000 reported to the police.
Fraud totalling £424m was reported to the police between December 2011 and May 2012. Of this, £253m came from public administration, mostly tax fraud.
The reduction in fraud varies across the sectors. In the pubic sector it was down 41 per cent. Last year, the finance and insurance sector accounted for almost three-quarters of all reported fraud. This figure has now reduced to 17 per cent. Procurement fraud fell from £25m last year to £3m.
But questions have been raised about the credibility of the figures. Public sector organisations are required to report fraud, but companies and not for profit bodies are able to handle matters internally, if they choose to do so. The dramatic fall in the overall level of fraud may be partly related to reputation management rather than less fraud being committed.
Simon Bevan, head of fraud services at BDO, said: “We suspect that organisations are only bringing in the authorities for small, relatively simple frauds. If that’s the case, I’m in no doubt that reputation management is a key factor in this decision. Organisations just don’t want to air their dirty linen in public. It would appear that the police are no longer the first port of call when it comes to dealing with the large, complex frauds that can be so damaging to reputation.”