Smarter approach to counter fraud could save MOD millions, new report claims
A new report from the National Audit Office (NAO) claims a smarter approach to tackling fraud and economic crime could save the Ministry of Defence millions of pounds.
The MOD reports that its potential exposure to fraud can reach up to £1.5 billion a year, mostly from procurement, but that doesn't account for the effectiveness of its controls.
According to the NAO, which scrutinises public spending, the Ministry of Defence recouped on average just 48p for every £1 spent on counter-fraud work over the last four years – despite government expectations of public bodies to save £3 for every £1 spent on counter-fraud work.
The report cites a fragmented structure leading to investigation inefficiencies, and a historic lack of trust between counter-fraud and police teams.
The MOD does have a counter-fraud team and several defence police authorities which can tackle economic crimes like bribery, fraud and corruption.
There is a recent improvement in this area. In the year 2024 to 2025 specifically, the department managed to recover more than it spent – saving £1.34 for every £1 spent.
Recent whistleblowing disclosures to the NAO reportedly indicate allegations can take a long time to resolve or do not reach a satisfactory resolution.
To build on recent improvements to the MOD's approach, recommendations include setting a department-wide objective to bring down the overall estimated financial loss due to these threats.
Other recommendations include improving the triaging of cases and the gathering of intelligence from across the MOD to develop the department's understanding of fraud risk and publishing a detailed estimate of its total fraud losses.
Gareth Davies, head of the NAO, said reform in processes are required, but would enable defence "to achieve real savings that could be used to enhance the country’s defence capability."
There were also calls from the NAO for a senior official to act as the MOD's representative in cases where the department is the victim of economic crime, and for an accountable multi-disciplinary body to be established – bringing together the various counter-fraud and police teams that investigate such threats.
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