Public sector cuts could see fraud rise, warns PwC
The severity of the planned cuts in public sector spending could lead to an increase in fraud. That’s according to forensic services experts at PwC in the Midlands, which said that the number of cons could rise due to a reduction in the amount of resources available to detect criminals.
PwC said that there was a heightened risk of fraud arising from employees and suppliers suffering financial pressures as a result of redundancy or contract termination. The scams could go unaddressed by public sector organisations as a result of there being fewer resources, according to the organisation’s latest report, entitled Navigating Your Way Through Stormy Waters.
John Morris, director and forensic services expert at PwC in the Midlands, said: “Given the severity of the planned cuts in public sector spending, there are likely to be significant reductions in staffing costs, termination or scaling back of programmes, streamlining of systems and ceasing of activities in many areas of government. Such changes will have undoubtedly impact on public sector workers and the private sector companies that rely on the public sector economy for a large proportion of their business.
“When considered alongside the risk that opportunities to commit fraud will increase because of the expected changes in government structures, resource limitations and diverted management focus, the likelihood of a significant increase in internal and external fraud against the public sector is a real threat."
