Crack Covid fraud squad set up to seek out criminals stealing millions from the taxpayer

Lord Agnew walks out of Lords chamber after resigning

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The new £25million Public Sector Fraud Authority (PSFA) team was unveiled today by the Minister for Brexit Opportunities and Government Efficiency after a delay caused by attempts by senior figures in the Treasury to remove all its powers. The watchdog’s main task is to employ experts to recover money stolen from Covid support schemes which could amount to billions and inspect Whitehall programmes to uncover vulnerabilities.

It was agreed in the wake of Lord Agnew’s sudden resignation in January when he quit at the Dispatch Box over a lack of government action in tackling covid fraud.

The issue has also come up in the leadership contest where former Chancellor Rishi Sunak was accused by one of his rivals Kemi Badenoch in the ITV debate of blocking action to tackle fraud concerns.

The new body, which had received the backing of Mr Sunak, was meant to be launched at the beginning of last month but Mr Rees-Mogg pulled the plug on it after the Treasury intervened at the last minute on the eve of the launch to remove its main powers rendering it “toothless”.

Mr Rees-Mogg pulled the launch and accused the Treasury officials of “sabotage” pointing out that it would be powerless to investigate fraud

Crucially the PSFA would have to report to Treasury officials and not be allowed to go directly to the Cabinet Office, ministers or Downing Street.

But after Mr Sunak’s resignation and installed in his new job overseeing the end of Government waste, Mr Rees-Mogg with the backing of Boris Johnson has seen off objections from Treasury officials and got his way on setting up the new team.

A source close to Mr Rees-Mogg said: “This is a victory against the civil service blob. The PSFA will cause a few departments some embarrassment by uncovering fraud but that is why it was needed.”

The new team at the heart of government has been told to hunt down fraud committed against the public purse, with a £180 million target set for the first 12 months.

The Domestic And Economic Efficiency And Value For Money Committee has challenged the new organisation to work with departments to agree longer-term targets by December.

The PSFA will be made up of counter fraud and data experts, using best-in-class tools and advanced analytics to help departments and public bodies protect public money. It will be supported by a cross sector Advisory Panel that will provide expert advice and help shape the strategic approach to public sector fraud prevention and reduction.

The Advisory Panel will have a chair, who will be announced in September. 

Backed by £25million of new funding, the organisation will modernise the government’s counter fraud response, working with departments and public bodies to test their fraud defences, using leading practice and modern techniques, and then to help them put stronger safeguards in place.

Mr Rees-Mogg, said: “Public sector fraud is not an attack on a single person, and so to many the pain feels less sharp than when directed at individuals. But fraud attacks on government are attacks on money earned by much put-upon taxpayers.

“They are an attack on the emergency services whose funding they deplete, similarly they steal money from infrastructure projects. 

“As criminals develop more sophisticated tools, we too must adapt and modernise.

“So we’re attracting the brightest minds and equipping them with tools to detect, prevent and deter those who seek to steal money intended to fund vital public services.”


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Chief Secretary to the Treasury Simon Clarke said: “The launch of the new body will put a laser-like focus on fraud and renew our efforts to combat people taking advantage of our public services and support.

“It will reinforce wider investment in government to crack down on fraud and mis-claiming, including £210 million for HMRC to further tackle fraud, and £510 million for DWP to target welfare fraud in 2021.

“Tackling fraud will drive efficiency, saving taxpayers’ hard-earned money which is even more important as we know people are struggling with the rising cost of living.”

Ahead of a permanently appointed head of the Authority, the organisation will be led by Mark Cheeseman, an internationally recognised expert in public sector fraud, who led the creation of the government’s Counter Fraud Profession.

He also set up the International Public Sector Fraud Forum – a collaboration between Australia, Canada, New Zealand, the United States and the UK to share, agree and publish leading practice on fraud management in the public sector.

He said: “The creation of the Public Sector Fraud Authority represents a landmark in our fight against public sector fraud. We know that fraudsters are a committed, capable and evolving adversary. To respond to this we must raise our ambition and challenge ourselves to increase our impact on this often unseen and underestimated crime.

“The PSFA will support public servants across government and public bodies to take that step – to innovate and to modernise our approach to fraud.”

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