Whitehall fraud 'costs UK millions'

THE GOVERNMENT has admitted that millions of pounds are being lost every year through fraud by civil servants in Whitehall and its agencies.

Worst performer is the Ministry of Defence, where losses through corruption have soared to more than pounds 1m from only pounds 63,000 in 1991.

These official figures, supplied by ministers to Malcolm Bruce, Liberal Democrat Treasury spokesman, show "a worrying trend" of increased fraud as more civil service work is handled by the new "arm's length" agencies.

At the Department of Education, more than pounds 500,000 has been lost in the last four years, of which only pounds 34,500 has been recovered.

Education department officials even confess that they do not keep records of missing money if they do not know who has stolen it. "Where thefts have occurred but no perpetrator identified, these cases have been excluded," said education minister Eric Forth.

Two of Whitehall's biggest-spending departments - Transport and Social Security - are unable to say how much is lost from their offices through fraud.

The loss from agencies is often greater than from the sponsoring department itself. At Education, pounds 322,636 has disappeared from agencies set up to run such things as the funding for grant-maintained schools.

Mr Bruce said: "One of our top priorities is to clean up the mess in British politics - and that includes the waste and corruption in Government departments."

The Treasury probably has the best record for hanging on to the taxpayers' money. Over the last four years, there has only been one case of fraud, involving pounds 22,000, none of which was ever recovered. By contrast, the Home Office, which looks after law and order, had five cases last year alone, involving the loss of pounds 40,296 - of which pounds 301 was clawed back.