The NHSCFA has produced an annual SIA since 2017. Over the course of the last six years, the fraud landscape has changed, and threat increased, with fraud assessed as accounting for 41% of all criminal offences in England and Wales. This is assessed in government reports to have equated to £21 billion of loss in the two years since the pandemic (2020 – 2022) as opposed to £5.5 billion in the two years before the pandemic (2018 – 2020). Despite responses to the threat of fraud evolving, the ability and motivation of criminals to adapt and counter developed systems and best practices remains present.
The NHSCFA assesses the NHS is vulnerable to fraud, bribery, and corruption to an estimated £1.264 billion. This is a £66 million increase on last year and equates to 0.8% of NHS expenditure (£157.9 billion) during the 2021 – 2022 financial year, including additional funding due to the COVID-19 pandemic. Despite this increase in financial vulnerability, the percentage of vulnerability against the NHS budget continues to remain below 1% and 0.8% is the second lowest percentage since the SIA was launched in 2017.
To counter the threat and vulnerability to fraud, bribery, and corruption, the NHSCFA and its partners have realigned strategic priority areas to the current fraud landscape. The response to fraud within the NHS in England is now split into three categories:
- strategic priority: ensure that counter fraud activity is proactively pursued with threats, vulnerabilities, enablers, risk, and financial vulnerability reported on an annual basis.
- intelligence collection: intelligence resources are assigned to improve the intelligence picture with threats, vulnerabilities, enablers, risk, and financial vulnerability reported on an annual basis through the SIA.
- strategic oversight: fraudulent activity is monitored to determine any fluctuations or depreciation in effectiveness of counter fraud functions. These areas will no longer be reported on an annual basis within the SIA; however, a combined notional financial vulnerability figure will be provided for transparency.
Counter fraud mechanisms within the NHS in England have also continued to improve with many initiatives implemented, such as increased emphasis on due diligence against payment diversion fraud, Real Time Exemption Checking (RTEC) to deter patient exemption fraud and continued Post-Payment Verification (PPV).
Despite this, financial vulnerability has increased for this reporting period by £66 million although this is largely due to increases in budgets, and therefore, heightened exposure to potential fraud, bribery, and corruption. For example, this would include the increase in budgets to both procurement and commissioning of services, most overtly in procuring agency staff. Additionally, there has been an increase in patient service activity and a return to comparable pre-pandemic levels. For example, there has been an increase in those accessing dental and optical treatments and claiming exemption, services largely prohibited during lockdown periods.
Contrary to financial vulnerability, reports received by the NHSCFA this reporting period have decreased by approximately 15% compared to last year (6,161 reports decreasing to 5,252) and largely the result of a significant reduction of 72% in COVID-19 related reporting. This is predominantly due to procurement and commissioning of services fraud reports seeing the largest decrease. However, there has been an increase in payment diversion fraud reporting and likely the result of promoting the reporting of suspicious behaviour through an NHSCFA proactive exercise. Overall, reporting has decreased in almost all thematic areas, and perhaps still a legacy of pandemic restrictions and reduced oversight of suspicious behaviour. Similarly, the impact of NHSCFA prevention guidance and interventions may also be factors in reporting behaviour.
The table below provides an overarching summary of the current financial vulnerability picture compared to last year’s SIA. It is important to note these are assessments of the financial vulnerability to fraud, bribery, and corruption and not an indication of direct loss to fraud. These figures run alongside the amount of direct fraud reports made to the NHSCFA.
Due to the time frame for public release of activity and financial data, financial vulnerability estimates run a year in arrears to reporting data, therefore, this assessment will include 2021 – 2022 financial data and 2022 – 2023 reporting data. In addition to the 5,009 reports attributed to a thematic area, there are an additional 243 reports where no thematic area was ascertained.
| Strategic priority area | 2022 – 2023 financial vulnerability estimate | 2021 – 2022 financial vulnerability estimate | Difference (£m) | 2022 – 2023 direct referrals to NHSCFA |
|---|---|---|---|---|
| strategic-priority-areaProcurement and commissioning fraud | 2022 – 2023 financial vulnerability estimate£391.5m | 2021 – 2022 financial vulnerability estimate£336.4m | Difference (£m) +£55.1m | Difference (£m)652 |
| strategic-priority-areaPatient exemption fraud | 2022 – 2023 financial vulnerability estimate£271.8m | 2021 – 2022 financial vulnerability estimate£214m | Difference (£m) +£57.8m | Difference (£m)891 |
| strategic-priority-areaData manipulation fraud | 2022 – 2023 financial vulnerability estimate£155.9m | 2021 – 2022 financial vulnerability estimate£249.1m | Difference (£m)-£93.2m | Difference (£m)15 |
| strategic-priority-areaCommunity pharmaceutical contractor fraud | 2022 – 2023 financial vulnerability estimate£123m | 2021 – 2022 financial vulnerability estimate£122m | Difference (£m)+£1m | Difference (£m)101 |
| strategic-priority-areaGP contractor fraud | 2022 – 2023 financial vulnerability estimate£101m | 2021 – 2022 financial vulnerability estimate£101m | Difference (£m)+£0m | Difference (£m)190 |
| strategic-priority-areaOptical contractor fraud | 2022 – 2023 financial vulnerability estimate£79.7m | 2021 – 2022 financial vulnerability estimate£38.7m | Difference (£m)+£41m | Difference (£m)23 |
| strategic-priority-areaDental contractor fraud | 2022 – 2023 financial vulnerability estimate£57m | 2021 – 2022 financial vulnerability estimate£61m | Difference (£m)-£4m | Difference (£m)78 |
| strategic-priority-areaNHS staff fraud | 2022 – 2023 financial vulnerability estimate£31.5m | 2021 – 2022 financial vulnerability estimate£22.6m | Difference (£m)+£8.9m | Difference (£m)2660 |
| Intelligence collection | ||||
| strategic-priority-areaFraudulent access to secondary care from overseas visitors | 2022 – 2023 financial vulnerability estimate£43.5m | 2021 – 2022 financial vulnerability estimate£39.3m | Difference (£m)+£4.2m | 299 |
| strategic-priority-areaReciprocal healthcare fraud | 2022 – 2023 financial vulnerability estimate£0.467m | 2021 – 2022 financial vulnerability estimate£1.94m | Difference (£m)-£1.5m | Difference (£m)4 |
| Strategic oversight | ||||
| strategic-priority-areaAdditional area (NHS Bursaries and NHS Pension fraud) | 2022 – 2023 financial vulnerability estimate£9.5m | 2021 – 2022 financial vulnerability estimate£12.7m | Difference (£m)96 | |
| Total | 2022 – 2023 financial vulnerability estimate£1.264bn | 2021 – 2022 financial vulnerability estimate£1.198bn | Difference (£m)+£66.1m | Difference (£m)5009 |
A five-year breakdown of financial vulnerability per thematic area is depicted in the chart below. Where a loss measurement exercise has not taken place, or a comparative assessment not available, a baseline financial vulnerability rate of 1% of funding allocation or expenditure is used. This is the case in procurement and commissioning of services fraud, community pharmaceutical contractor fraud and GP contractor fraud. Increases in financial vulnerability within each thematic area reflects increased expenditure and not an assessed increase in fraud, bribery, and corruption.
| Year | Procurement & commissioning | Data manipulation | Patient exemption fraud | Pharmaceutical contractor | GP contractor | Dental contractor | Optical contractor | NHS staff | Fraudulent access to secondary care | Reciprocal healthcare | NHS Pension / Bursaries | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year2019 | Procurement & commissioning351 | Data manipulation114 | Patient exemption fraud251.7 | Pharmaceutical contractor108 | GP contractor88 | Dental contractor93.5 | Optical contractor82.4 | NHS staff94.6 | Fraudulent access to secondary care35 | Reciprocal healthcare21.7 | NHS Pension / Bursaries14.4 | |
| Year2020 | Procurement & commissioning291.4 | Data manipulation136 | Patient exemption fraud259.5 | Pharmaceutical contractor114 | GP contractor91 | Dental contractor65.9 | Optical contractor82.9 | NHS staff98.2 | Fraudulent access to secondary care35 | Reciprocal healthcare20.8 | NHS Pension / Bursaries10.9 | |
| Year2021 | Procurement & commissioning300.4 | Data manipulation107 | Patient exemption fraud267.7 | Pharmaceutical contractor117 | GP contractor93.8 | Dental contractor61.3 | Optical contractor84.9 | NHS staff26.07 | Fraudulent access to secondary care56.7 | Reciprocal healthcare12.05 | NHS Pension / Bursaries14.9 | |
| Year2022 | Procurement & commissioning336.4 | Data manipulation249.1 | Patient exemption fraud214 | Pharmaceutical contractor122 | GP contractor101 | Dental contractor61 | Optical contractor38.7 | NHS staff22.6 | Fraudulent access to secondary care39.3 | Reciprocal healthcare1.94 | NHS Pension / Bursaries12.7 | |
| Year2023 | Procurement & commissioning391.5 | Data manipulation155.9 | Patient exemption fraud271.8 | Pharmaceutical contractor123.0 | GP contractor101 | Dental contractor57.0 | Optical contractor79.7 | NHS staff31.5 | Fraudulent access to secondary care43.5 | Reciprocal healthcare0.467750 | NHS Pension / Bursaries9.5 | |
The impact of the pandemic is illustrated in the financial years covered by this and last year’s SIA, 2020 – 2021 and 2021 – 2022 respectively. For example, procurement and commissioning of services, where expenditure increased due to the pandemic, resulted in financial vulnerability increases of £36 million in 2022 and another £55.1 million this year. Conversely, in thematic areas to reflect patient service activity, there were decreases in financial vulnerability in the first year of the pandemic, for example, patient exemption fraud vulnerability decreased by £53.7 million in the 2022 SIA yet has increased by £57.8 million this year. This was the result of a significant decrease, due to pandemic restrictions, in those accessing dental and optical treatments and claiming exemption; however, activity has returned to pre-pandemic levels, and as such, financial vulnerability has increased.
This activity trend was also shown in areas where healthcare access is reliant on travel, with lockdown restrictions meaning fewer people were likely to have travelled, or been allowed travel, to access the NHS or healthcare overseas. With a financial vulnerability decrease in 2022, an increase this year implies pre-pandemic activity and behaviour is starting to be reestablished.
NHS budgets have increased by £20.5 billion during the pandemic years and are predicted to remain at these levels over the coming years. Alongside activity largely returning to prepandemic levels and the heightened pressures from a cost-of-living crisis, it is assessed that financial vulnerability to fraud, bribery, and corruption will likely increase in subsequent reporting periods. This is due to more finances exposed to fraud and increased temptation by some to mitigate these pressures through fraudulent practices.
However, it is important to note that fraud is only committed by a minority of people. As more and more people become aware of how fraud impacts on the NHS, it is expected that more reports will be submitted to the NHSCFA. Through increased intelligence and knowledge, the NHSCFA and stakeholders are better informed of the ever-changing fraud landscape, and as such, can increase capabilities to effectively direct resources and mitigate against potential vulnerabilities.