Britain's public finances are haemorrhaging between £55billion and £81billion annually through fraud and error, according to a damning new report from the Public Accounts Committee (PAC).
The select committee determined that ministers have yet to show sufficient drive to harness artificial intelligence (AI) and data analytics to stem these losses despite Chancellor Rachel Reeves's attempts to balance the books.
The cross-party group of policymakers found that while Whitehall claims deploying data analytics could save taxpayers approximately £6billion annually, there is little confidence that public bodies are properly equipped to deliver such savings.
Digital and counter-fraud specialists across government lack any comprehensive strategy to help departments reduce fraud and error through modern analytical tools, the PAC concluded.
Fraud is costing taxpayers billions of pounds, a new report has found
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The Government's digital roadmap, released in January, pledged to embrace AI and modernise ageing technology, but the PAC claimed it offers scant detail on implementation timelines and makes no mention whatsoever of combating fraud and error.
This perceived absence of concrete planning comes amid persistent struggles with outdated IT infrastructure and weak digital leadership.
Notably, the committee asserted that its 2023 call for every department to install a digital expert on its board remains unfulfilled, despite ministers accepting the recommendation.
Furthermore, the PAC identified another significant leadership gap in the form of DSIT's decision to abandon plans for appointing a Government Chief Digital Officer.
The committee's report found that billions of pounds in 'public money continues to roll out the door'
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Benefit fraud - from your wallet: Total amount lost to benefit fraud per year | GB NEWSThe committee views this as a serious failing, arguing such a role would have provided the department with far greater authority to drive the sweeping digital transformation required across Whitehall.
Previous analysis has revealed that roughly 28 per cent of central Government IT systems were obsolete in 2024, creating a substantial drag on modernisation efforts.
Transparency around algorithmic decision-making also remains woefully inadequate. When the PAC raised concerns in March 2025, just 33 records appeared on the government's dedicated transparency website.
That figure had risen to only 125 by the time of this latest report, with DSIT acknowledging that many expected entries remain unrecorded. Of these, merely 11 referenced fraud detection.
PAC chair Sir Geoffrey Clifton Brown issued a stark warning over the report's findings
| PARLIAMENTCurrent legislation further hampers anti-fraud efforts by prohibiting individual profiling, meaning officials cannot flag known fraudsters for future detection purposes.]
National Fraud Initiative data can also only be retained for two years under existing rules, and the PAC has recommended the Public Sector Fraud Authority inform Parliament where legislative changes might prove beneficial.
Sir Geoffrey Clifton-Brown, the committee's chair, offered a stark assessment: "Our evidence suggests that government has a lot of data, but no information. This Government has talked a big game on embracing new technology, its delayed roadmap on modern digital government fails to even mention how this will tackle fraud and error, and it continues to struggle with the dead weight of legacy technology."
Without a robust plan, Sir Geoffrey warned, "Government will only be able to mouth its disapproval as billions in public money continue to roll out of the door into the hands of fraudsters."