MoD audit reveals £11 million overpayment to suppliers

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20 August 2013 | Will Green

The Ministry of Defence (MoD) overpaid suppliers to the tune of £11 million in the previous financial year, an audit has revealed.

Officials found duplicate and overpayments for common goods and services such as stationery were behind the overspend. The MoD’s ‘spend recovery audit’ was carried out as part of work to cut government error and fraud, which saw £6.5 billion cut from public spending last year. All government departments will be carrying out spend recovery audits.

Cabinet Office minister Francis Maude said: “Every government promises a crackdown on fraud and error, but we are delivering, with£6.5 billion saved last year alone. That’s nearly £400 saved for every working family. But there are still too many cracks for fraudsters to slip through. Hard-working families expect us to address this. Our priority is to enable different parts of government to share data about fraudsters and work as one to catch them. This will ensure we further reduce the shocking losses to fraud and error much faster.”

Her Majesty's Revenue & Customs found £6 billion of the savings by clamping down on tax evasion and avoidance, including specialist taskforces set up to target specific industries such as restaurants on the south coast and the Scottish motor trade.

The Department for Business, Innovation and Skills saved £13 million by introducing new checks on student loan applications, while the Department for Transport saved £1 million by redesigning a standard letter used to call in debts.

The Department for Work and Pensions cut “hundreds of millions of pounds” in fraud and error by making greater use of data matching, reviewing and correcting claims and imposing harsher penalties on fraudsters.

Lord Freud, minister for welfare reform, said: “We've done a great deal to prevent fraud from entering the benefit system and to detect and punish those who try to play the system. With the introduction of Universal Credit, we're making it harder than ever for cheats to steal from the British taxpayer, reducing benefit fraud by £200 million a year.”

In 2011, it was revealed the government lost as much as £30 billion to fraud and error each year.

Meanwhile, the government has announced £109 billion of future construction projects, including a £40 billion commitment to High Speed 2, to help suppliers plan ahead, along with a new online portal.

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