Fraud bosses warn against manager cuts

The Health Sector Journal has today published an interview with Alex Rothwell and Richard Hampton following three years of work by the CFA Fraud Prevention Unit to identify areas of fraud risk in procurement and helping trusts close those vulnerabilities

Published: 14 November 2022

It has had a significant impact on spending behaviours across the NHS, leading to a reduction of vulnerability of almost £160 million.

  • Vigilance of adequately resourced back-office teams are key to preventing fraud in the NHS
  • Dwindling numbers of administrators and counter-fraud specialists the ‘elephant in the room’
  • Comes as the agency sees progress in closing potential fraud vulnerabilities in procurement processes

Cutting back-office staff who guard against fraud in NHS procurement and finance operations is a false economy, according to the leadership of the NHS Counter Fraud Agency.

portrait image of Richard Hampton
Alex Rothwell

The NHS Counter Fraud Authority has recently finished a three-year piece of work identifying areas of fraud risk in procurement and helping trusts close those vulnerabilities. It estimates trusts have moved £156.7m worth of spending out of vulnerable processes as a result of the project.

The agency is keen to stress the importance of trusts proactively seeking out instances of fraud or vulnerabilities in their operations so they can prevent losses in the future.

However, NHSCFA’s chief executive, Alex Rothwell, and head of intelligence and fraud prevention, Richard Hampton, told HSJ this would not be possible without enough trained staff.

Mr Hampton said the “elephant in the room” was that “the number of staff that are able to be that vigilant is ever decreasing”.

He added “finance teams or any back-office function is obviously looked at when budgets are tight. Now I don’t want to enter into a political discussion here at all but having adequate people to do the checking is important if [you want to protect] the funds that allow you to provide the patient care.”

portrait image of Richard Hampton
Richard Hampton

Mr Rothwell said his agency sees investing in counter-fraud activity as “a good business decision”.

The agency is calling on trusts to reinforce their operating procedures and processes to ensure staff process payments through purchase-to-pay or purchase order systems, “and hold staff to account when the prescribed procedures are not followed”.

NHSCFA has been running a national proactive exercise over the past three years to improve its understanding of financial vulnerabilities.

It focussed on trusts spending outside purchase order systems, which handle the purchase and payment process end-to-end to create a clear audit trail.

There are various reasons trust staff may go outside purchase order systems, Mr Hampton said. “It could be either need for speed, [it] could be lack of training for staff, it could be any number of reasons”.

Data from 79 trusts showed there were 282 instances of trusts spending outside purchase order systems in 2019-20. The total cost of this activity was £757.4m. This fell in 2020-21 to 2023 instances, amounting to £600.6m, according to an NHSCFA report published in June.

These reductions were seen across all but one category of spend. Mr Hampton said that “building and engineering products and services” were “more susceptible to short-notice changes that may require protocols to be bypassed”.

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