Current context, risks and challenges
Published on 29 November 2023
Fraud offending continues to rise in Scotland, increasing by 86% since 2012-13, and a 10% rise, year on year, to 2021/22 [1]. While the rate of offending becomes predictable in its escalation, the methods deployed by fraudsters changes as new opportunities emerge.
The public sector has always presented opportunities to fraudsters and crime groups. Consequently, the Public Sector Fraud Authority estimates fraud in the public sector as costing between 0.5 to 5% of annual expenditure [2].
With an annual budget of £18bn, there are areas of the health service known to be vulnerable to fraud. Protecting taxpayers’ money from fraudsters has always to be balanced with the important and often urgent delivery of healthcare.
Our Strategic Assessment 2023-26 identified the: - Vulnerability to fraud in the higher risk area is assessed between 0.5% - 2.5% per annum Impact and harm including reputational damage to NHS Scotland Likelihood and frequency of occurrence identifying risk areas as a priority Capability and capacity to mitigate such risks NHSScotland is resourced from public funds and when fraudulent activity occurs, monies are diverted from patient care which decreases the ability to purchase new equipment or technology in the advancement of health care. It also diminishes services and impacts frontline and specialist staff making it difficult to retain their skills.
COVID-19 had a systemic impact on NHSScotland, with resources at capacity dealing with effects of the pandemic and patient care as a priority. In addition the increased spend and sourcing of Personal Protection Equipment during this time.
The National Cyber Security Team assess ransomware as the biggest threat to the cyber security of NHSScotland. Even if data is not stolen as part of an attack, the impact to ongoing service delivery as affected networks are isolated and rebuilt can be significant.
A counter fraud capability is crucial to detect, investigate and mitigate fraudulent or criminal activity which impacts NHSScotland’s ability to deliver health services for the people of Scotland.
[1] Recorded Crime in Scotland, 2021-22, Scottish Government, ISBN 978-1-80435-651-7, p.33
[2] Fraud and Error: good practice guide, 2021, National Audit Office