A recent review into spending errors and corruption at government level has revealed that local councils across England, Scotland and Wales are facing huge fraud prevention and detection challenges.
While councils have a legal responsibility to protect the public funds they administer, the reality is that many councils are drowning in an “administrative glut” that makes it impossible for their finance teams to truly control and manage spend. The knock on effect is that local government authorities, when compared to private organisations of a similar size, are vulnerable with councils in particular seen as soft targets by criminals and opportunists.
This year it is estimated that spending errors and fraud will cost councils between £275 million and £2.75 billion. Additionally, a 2020 study by the Department of Communities & Local Government has found that 23% of councils experienced at least one case of procurement related fraud in the 2017-2018 financial year.
This leaves us asking, how much taxpayers’ money is it acceptable to waste? £100m? Maybe £200m?
The UK Anti-Corruption Strategy 2017- 2022 aims to minimise spending error in councils and reduce corruption in public procurement. Public bodies need to find ways to make better use of taxpayers’ money and avoid wasteful or unnecessary spending.
The first steps to minimising spending error
- Better identification of procurement risks
- Greater procurement transparency and controls
- Increased awareness of spend control in contracting authorities.
It’s widely agreed that the public will only have greater confidence in the institutions and organisations that serve their interests when stronger procurement protections and systems are put in place.
The Ministry of Housing, Communities & Local Government has set out a number of suggested next steps for councils and the public sector as part of this cross-government effort. In short, it is advised that all councils should review their procurement management structures and take steps to reinforce procurement control systems so that they are watertight and audit ready.
Councils that can eliminate error prone spending spreadsheets and messy paper trails, have a much higher chance of detecting errors and mistakes at various stages of the procurement lifecycle.
For that very reason, council finance teams in particular are being encouraged to embrace data focused tools and technologies to prevent and detect fraud and corruption. An increased focus on electronic recordkeeping is crucial when it comes to identifying financial discrepancies that need to be followed-up and investigated.
At ProcurementExpress.com we’re actively helping a number of councils across the UK to get better visibility of their spending and highlight procurement risks in their organisations.
Don’t delay in getting audit ready. If the procurement processes in your council is dated or due a review, please reach out to us for expert support and guidance so that your team is covered in the event of a procurement breach.
You can also view Council Resources here.