UK public sector said to be at risk of economic crimes

Public sector bodies face a growing risk of economic crime and fraud as spending cuts start to bite, new research showed.

Job losses and the fear of redundancy are the main factors behind the looming threat, according to a survey by accounting firm PricewaterhouseCoopers (PwC).

Over half the UK respondents (52%) said their organisation suffered economic crime in the last 12 months compared with a global average of 32%.

Of these, 80% reported the theft of assets, including cash or equipment or supplies, while four in 10 reported incidents of financial statement fraud.

Both of these measures are markedly higher in the UK than the global average.

Richard Neave, forensics director, PricewaterhouseCoopers LLP in Scotland, said: “Over the last few years, we have clearly seen the direct effect of economic pressures on peoples’ ability to rationalise fraudulent actions – neither the private nor the public sector are immune.

“With cuts threatening the pace of recovery in Scotland and a looming public sector recession we cannot ignore the fact that these pressures are going to be felt sharply in the coming years.”

The new Government announced a range of cuts in the recent emergency Budget aimed at tackling the UK’s £155 billion annual deficit.

More than 170 senior representatives in 35 countries around the world took part in the survey, including 44 in the UK.

A majority of UK respondents reported increases in levels of economic crime over the last 12 months, and most believe their organisations are at greater risk in the current economic environment.

Source: Press Association