Labour’s manifesto for the 2024 general election set out its commitment to act against fraud and waste across the government. Looking back on the first 12 months of Keir Starmer’s rule, we ask: has the government been true to its word? What impacts have we seen in the public and private sectors?
There have been many positive developments. Since its electoral victory in July 2024, the Labour government has significantly stepped up its counter-fraud measures: bolstering funding; passing legislation to empower multiple government departments and agencies; increasing the staffing of His Majesty’s Revenue and Customs (“HMRC”); and introducing whistleblower reward schemes.
Public Authorities (Fraud, Error and Recovery) Bill
Soon after the December 2024 recruitment of a COVID corruption commissioner to investigate the estimated £6.2bn of public money believed lost to fraud during the pandemic, the government introduced the Public Authorities (Fraud, Error and Recovery) Bill. Introduced in January 2025, the bill seeks to delegate new powers to the Public Sector Fraud Authority (“PSFA”), enabling it to investigate public sector fraud outside of the tax and social security systems. As recently as 25 June 2025, the bill was reported with amendments in the House of Lords in advance of a third reading.
Part 1 of the bill allows the PSFA to initiate or adopt investigations into public sector fraud, reducing reliance on the police. Importantly, it also gives the PSFA civil information gathering and information sharing powers, which will enable the PSFA to compel information holders to provide information as part of a fraud investigation.
Part 2 strengthens the capabilities of the Department for Work and Pensions (“DWP”), allowing it to query bank data, direct recoveries from accounts, issue driving bans, and extend the time limit for filing civil claims.
The bill is estimated to deliver £1.5bn of benefits over the next five years. It authorizes the hiring of 3,000 DWP staff and forms part of a wider government plan to save £8.6bn over five years in the largest welfare fraud and error budget package in recent history.
However, in a blow to victims of pensions fraud, support will be withdrawn from the Pensions Dishonesty Unit. It is difficult to understand the rationale for this cut as the unit has helped more than 800 members of savings plans affected by dishonesty and has directed redress worth more than £40mn.
HMRC: Staffing Surge and Whistleblower Rewards
In the October 2024 autumn budget, the government announced a plan to collect an additional £6.5bn a year by cracking down on tax avoidance and evasion. This was raised to £7.5bn in the spring statement.
This windfall is projected due to the significant increase in staffing at HMRC, including 500 new compliance staff and £87mn earmarked to improve debt collection.
Arguably, the measure that garnered the most attention was the implementation of a whistleblower incentive scheme. While HMRC has long had a whistleblower reward scheme, its rewards were discretionary and not linked to the tax amount recovered. In 2024, while UK whistleblowers reportedly received around £978,000, the Internal Revenue Service paid US whistleblowers $88.8mn.
Emulating US-style rewards, the new system will pay whistleblowers 5%-30% of the additional tax recovered. This is anticipated to increase reports of tax evasion for further investigation.
HMRC’s combined approach will likely increase both the number and rigor of investigations into individuals and businesses who evade paying the correct tax.
Serious Budget Boost
In June 2025, HM Treasury announced the Serious Fraud Office’s planned budget increase from £89mn to £98mn by 2028. The money is expected to be spent on strengthening asset recovery, improving case management systems, and investing in digital forensics infrastructure. The Office has already said that introducing AI-powered disclosure management tools has significantly increased efficiency, reducing one of their biggest historical claims on employee time.
Director Nick Ephgrave has been bullish on reducing case times and charging more cases. He has also expressed interest in setting precedent in relation to tenets of the Economic Crime and Corporate Act 2023. Introduced in the previous parliament, the new offense of Failing to Prevent Fraud will be in force from September 2025. However, as the Act’s significant lowering of the threshold for corporate criminal liability from “directing mind and will” to “senior manager[ial]” conduct, which has been active since 26 December 2023, will likely soon be tested. Organizations should ensure they have assessed, and mitigated, if possible, their increased exposure to criminal liability.
What Next?
To date, a glaring omission in the government’s response is a national counter-fraud strategy. However, Fraud Minister Lord Hanson has promised publication of this strategy in November 2025. We anticipate it will address critical topics such as enhanced engagement with technology companies, improving data-sharing measures, and harnessing developing technology, including AI.
Engagement with technology companies has traditionally been a challenge for governments owing to the international reach of such firms, which has often seen them resistant to governmental pressure. However, progress is being made in the private sector, with the March 2025 announcement that banks, technology companies, and telecommunications carriers have increased their sharing of live fraud data.
While whistleblowing rewards have proven effective in tackling economic crime, particularly in the US, Director Nick Ephgrave would be wise to first seek improved protections for whistleblowers, especially with whistleblowing charity Protect and not-for-profit organization WhistleblowersUK both advocating for legal reforms to increase safeguards. Whistleblowers often expose themselves to great personal risk: they should be protected first; rewarded second.
Conclusion
Even in their inchoate stages, these reforms should be commended, with caution. They show real intent, but absent a clear, unifying anti-fraud strategy, they risk becoming another example of well-intentioned but ineffective government policy.
