Universities accused of 'hiding' £1bn fraud crisis

Fraud costs the higher education sector more than £1bn a year, a report published yesterday found. The study shows that the sector has the worst record of any public service in tackling the problem. Dr Mark Button, director of the Centre for Counter Fraud Studies at the University of Portsmouth, said there was a tendency for universities to keep the problem "hushed up and hidden away". By contrast, the NHS "goes after consultants, doctors and dentists who are on the fiddle," he said.

Examples of the types of fraud encountered in higher education range from institutions falsifying student returns to increase government grants, to academics making multiple grant applications to secure more funding.

Dr Jim Gee, chairman of the centre, added: "Fraud can be hugely damaging to any organisation but especially to higher education institutions at a time when the government is making serious reductions in expenditure and students are facing annual tuition fees of up to £9,000."

The report shows that fewer than one in 10 institutions accurately assess the amount of fraud they have suffered and, as a result, are not able to combat it effectively.