Experian identifies more than £1bn in public sector savings

Report says data validation could cut fraud in social housing, incapacity benefit, housing benefit and council tax

Data validation could save more than £1bn in public sector funds

Information services firm Experian has published a report identifying potential public sector savings of more than £1bn through the proper validation of individuals' personal data.

The report, entitled Fighting fraud in the government's age of austerity, also points out the potential for public sector fraud to double from its current level of £2.5bn per year.

The main areas for potential savings are £600m from social housing, £300m from incapacity and benefit fraud, £100m from single-person discount council tax fraud and £17m for housing benefit and other council tax fraud.

Andrew Davis, public sector head of fraud at Experian, pointed out that public sector fraud in the UK costs taxpayers more than £17bn a year.

"Our analysis suggests that this has been rising rapidly year on year – fuelled by specific, rectifiable challenges with the current system as well as financial stress and unemployment,” added Davis.

The key to beating fraud in the private sector, says Experian, is the use of electronic identity verification, fraud risk tools and data sharing. However, the problem with cracking public sector fraud is the "reluctance to share data between the private and public sector".

Experian says the provisions of the Data Protection Act 1998 and specialist powers provided under the Social Security Administration Act 1992 and Social Security Fraud Act 2001 are the key to allowing data sharing.

The company suggests that fraud will increasingly be perpetrated by those who have not historically been responsible for it.

"Much of this fraud will be opportunistic, triggered by unprecedented levels of personal financial stress," says the report.

Experian also points to "young, well-educated city dwellers who are increasingly turning to fraud to maintain lifestyles."