MoD exposing £1.5BILLION in British taxpayers' cash to fraud amid calls for 'radical change'

The Ministry of Defence is exposing an eye-watering £1.5billion in taxpayers' cash to fraud each year, a damning new report has revealed.

Parliament's spending watchdog has demanded "radical change" to soothe the deteriorating state of the public purse, while the Government is hit with demands to boost defence spending.

The report claims the MoD is "achieving little" in its response to hundreds of allegations of suspected economic crime.

The Public Accounts Committee further adds there is inadequate focus or leadership regarding the massive fraud risk exposed to the department.

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It added the MoD is unable to prove it is sufficiently protecting public funds, which should be poured into the British Armed Forces during a precarious time for international relations.

Over the past four years, the MoD has recovered as little as 48p for every pound of the on-average £5.7million a year it has splashed on tackling fraud and economic crime.

However, the Government has set out the ambitious aim for a £3 return for every pound spent – but the committee's inquiry has disclosed this is not expected to be achieved until 2028.

The £1.5billion figure is not considered particularly reliable and has been dubbed a mere "academic construct".

As a result, the inquiry, chaired by Sir Geoffrey Clifton Brown, urged for more "robust" data to be published to assist with informed decisions on future counter-fraud work.

Sir Geoffrey said the group of MPs were "disappointed at the unacceptable and continuing delay in a plan" to boost defence spending.

The Government has pledged to raise defence spending to 2.5 per cent of GDP from April 2027 and increase it to three per cent by 2029.

"But in the midst of these issues, our report finds that the MoD is far behind the curve in preventing the loss of precious public funds which could be spent on keeping our nation safe," the North Cotswolds MP added.

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“Incremental change will not suffice. There must be a radical change of culture within the MoD if the flow of funds lost to fraudulent activity is to be stemmed."

Meanwhile, Callum McGoldrick, the investigations campaign manager at the TaxPayers' Alliance, told GB News: "Taxpayers will be stunned that the Ministry of Defence could be losing up to £1.5billion a year to fraud while recovering pennies on the pound fighting it.

"At a time of global instability and strained public finances, this is money that should be strengthening Britain’s Armed Forces.

"Ministers must tighten procurement and crack down on the culture of waste draining billions from defence."

David Reed, Shadow Defence Minister, hit out at the report's findings and urged Labour to offer up a "credible plan" to boost defence spending.

"At a time of war in Europe and instability across the Middle East, every pound spent on defence must be properly protected and targeted towards capability," the Tory MP said.

"Labour's continually delayed Defence Investment Plan only increases uncertainty and undermines confidence that procurement risks are being addressed with the urgency required. The Government now needs to show it has a credible plan not only to increase defence spending, but to ensure that money is safeguarded from fraud, waste, and commercial abuse."

An MoD spokesman said: "The figures cited by the NAO primarily relate to a period under the previous Government. We are turning that around, and last year we saved £1.34 for every £1 spent on counter-fraud measures, significantly increased on 33p for every £1 spent in 2023/24 and we expect this to be further improved this year.

"The Defence Secretary is driving the biggest reforms to defence in over 50 years, fixing procurement, increasing accountability and tackling waste. As part of this, he has appointed the first ever National Armaments Director, with a remit that includes driving improved value for money from defence contracts.

"We have zero tolerance for fraud and corruption and we will continue to strengthen our controls, exploiting the latest technology to prevent and detect fraud and protecting taxpayer's money as we help keep the UK secure at home and strong abroad."

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