Cost of procurement fraud to Northumberland

Figures released last week by blur Group, from analysis of data used by the Government’s Annual Fraud Indicator, reveal that £9.1million a year is estimated to have been lost to procurement fraud by businesses in Northumberland and a further £1.5million by the county’s public sector.

It is recognised that some 20 per cent of all spend by organisations is unmanaged and often uncontracted, and so at risk to procurement fraud, the second most frequently reported form of economic crime.

“The figures are shocking,” admitted blur Group CEO Philip Letts.

“As well as private-sector companies wasting millions of pounds of their own potential profit and operating under a tighter financial burden, a major aspect of procurement fraud falls within the public sector which means taxpayers’ money is being wasted too. This part of an organisation’s spend is largely unmanaged, meaning many are not even aware that the issue is so prevalent. At a time when councils are seeking greater financial responsibility through devolution, it is imperative this is addressed.

“What I do find encouraging is that the problem is starting to be recognised and there is huge potential for organisations to do something about it. Some companies and councils are now beginning to tackle the issue, looking in detail at the cost and impact it has, improving processes to become more efficient and moving quickly to address inefficiencies to prevent failures to get the best price and mitigate the risks from rogue spenders and deliberate fraud.”