The National Health Service is firmly established as the government's pathfinder, pioneering a range of initiatives during a decade of almost continuous reform. The latest is the inception of a dedicated counter-fraud directorate. And already local government and the private sector are monitoring developments with a view to adopting its methods. The need for such a body within the health service is clear as millions of pounds are lost every year - £150m to prescription fraud alone. In local government almost £90m is lost annually. This is where the lessons learned by the fledgling NHS directorate of counter-fraud services may also be applicable. Half of all councils still lack an anti-fraud strategy. Already several councils are understood to be in discussion with the directorate to gauge whether its experience is similar to their own. Most prominent of these is Lambeth council in London - the former employer of NHS counter-fraud director Jim Gee. Central government is also keen to copy the NHS model. A Cabinet subcommittee has agreed in principle to adopt this approach to tackling fraud across departmental boundaries. And forensic accountants in the private sector are monitoring developments. Fraud specialists at Big Five accountancy firm Arthur Andersen are also understood to be examining the health service model. As far as Gee is concerned it is anti-fraud efforts within the health service that matter and he is confident that his work can provide the NHS with results. 'We have to acknowledge that we have failed to tackle fraud effectively so far,' he says candidly. 'We need to have a simple, intelligent approach to root out fraud across the NHS so the money can be channelled into patient services. This could work equally well in the private sector.' This intelligent approach is being pursued by the establishment of what Gee terms 'a new profession in the NHS', launched in a blaze of publicity this month. 'NHS staff will be highly skilled and trained specifically to tackle the problem and reduce it to an absolute minimum,' he says. Some £250,000 a year will be spent initially on training fraud investigators. Recruits to the counter-fraud operational service will be trained to recognised standards and accredited by the Institute of Criminal Justice Studies at the University of Portsmouth. Some candidates will be nominees from health authorities and trusts, including auditors - prompting the signing of an accord with the Audit Commission which defines the roles of auditors and fraud investigators. Gee hopes this protocol will avoid any potential frictions if auditors are trained to tackle fraud. Once fraud busters have been trained to foundation level, distance learning at advanced level gives participants the opportunity to go on and study for a Bachelor of Science degree or even a Masters degree. While this training framework is being established (it will become operational from March next year) outside organisations are watching closely to see how it progresses. 'We are trying to provide a learning route and a career path for this new profession,' explains Gee. 'And this has a significance beyond the NHS. We are being looked at for a lead for other departments. There are also one or two things that Europe could learn given some of the recent news.' Success should only be a short time in coming. Gee is expected to reveal a major arrest in a case where large-scale fraud by a dentist has been discovered. He has not yet been in his current post for a year and the announcement is sure to reflect the success the directorate has enjoyed during its short lifespan. In September the first results of the fraud measurement process will also be revealed. Patient prescription fraud will form the inaugural announcement which should highlight the amount of fraud occurring in that particular area of the health service. Then in November, the savings which have been achieved in the directorate's first year will be published. Gee is expecting them to be 'very substantial'. The success will partly be attributed to the breadth of experience the counter-fraud directorate has attracted. Of the people who have been recruited so far to lead teams, three are from local government, some are from the police force, one is from GCHQ and another comes from the Post Office. Feedback from existing professions in the health service has so far been positive and Gee is expecting auditors to be among those nominated for training in trusts and authorities. 'The variety of experience will be excellent and it means a tier of leadership that will be as good as it can be. We are also recruiting people with NHS expertise to match this fraud expertise,' says Gee. 'I hope we end up with a common standard across boundaries which is effective in tackling fraud,' he explains. If the success of the initiative within the health service matches its promise, that standard could soon be adopted throughout Whitehall and in town halls and corporate boardrooms across the country.