Fraudsters have stolen almost £1bn from Ministry of Defence since 2010

A Challenger 2 Main Battle Tank drives through (DPTA) Drawsko Pomorskie Training Area on Ex STEADFAST DEFENDER during a training scenario on Tuesday 7th May 2024, Poland.
The UK could have built 127 Challenger battle tanks with the money siphoned off to fruad since 2010 - Cpl Rebecca Brown, RLC/Army

Fraudsters have stolen almost £1 billion from the Ministry of Defence since 2010, official figures show.

The disclosure has prompted accusations that the MoD is seen as a “soft touch for thieves and corrupt government officials”, according to one senior civil servant.

The figures show that almost every area of defence, from personal expenses to the procurement of weapons, aircraft, and ships, has fallen victim to fraud costing the country millions.

The £1 billion losses could have paid for up to 127 Challenger tanks or 12 F-35 Lightning combat jets, which cost around £88 million each.

The figures also show that the MoD was being ripped off from within by members of the Armed Forces and civil servants, who have fraudulently claimed over £6 million in fake expenses for items such as food and travel costs.

But by far the largest loss was associated with procurement of equipment for both the Civil Service and the Armed Forces and accounted for just over £600 million costs since 2020.

Fraud has also been detected in pensions payments, recruitment, cyber and communication, personnel management and the Armed Forces’ joint personnel administration computer system.

The losses could have paid for 12 F-35 Lightning combat jets
The losses could have paid for 12 F-35 Lightning combat jets - Claire Hartley/Bav Media

In recent years, there have been allegations that the MoD paid millions of pounds to a firm that was a conduit for secret payments to Saudi officials, along with warnings that a £3.2bn delayed battlefield system could become a “disaster”.

Theft of defence assets has also increased, from costing the Government £19,000 between 2019 and 2020 to £1.38 million between 2023 and 2024.

From 2019, the detected cost of fraud in the MoD shot up considerably, driven by rising procurement fraud costs. From 2019-2020 the costs rose to £52.97 million. They were then £57.27 million in 2020-21 before rising to £147.24 million between 2021 and 2022.

The figures, released in answer to a parliamentary question, show that total detected fraud has surged from £240,000 in 2010-11 to £224.05 million in 2023-24.

Aside from tax and benefit fraud, which last year cost the UK an estimated £10 billion and £6 billion respectively, the MoD has the highest fraud costs in Government, according to a senior civil servant speaking on the grounds of anonymity.

“The statistics show that this has been steadily increasing over the last 10 years,” said the senior civil servant.

Mark Francois, a former Armed Forces minister, said: “At a time when the defence budget is under great pressure, every pound lost to fraud is a tragedy in itself.”

‘All cases are thoroughly investigated’

The true level of fraud could be even higher, and the costs are unlikely to be uncovered for several years. A National Audit Office report last year said the MoD’s fraud defence team estimated that the department could have been exposed to nearly £1.4 billion of fraud loss in 2021-22 alone.

The report said this was based on assumptions that “4.8 per cent of its annual procurement spend and 1.7 per cent of its staff costs are fraudulent”.

A defence committee report last month warned of a recruitment crisis, stating that the Armed Forces were “losing personnel faster than they can recruit” and are “consistently overstretched”.

A Ministry of Defence spokesman said: “As these figures reflect, we have significantly improved our measures to detect fraud in recent years, including procurement fraud which is the highest priority. To safeguard taxpayers’ money, all cases are thoroughly investigated and, where necessary, referred to the police.

“We are committed to tackling fraud more widely, from establishing a dedicated Public Sector Fraud Authority, which delivered £311 million in audited counter fraud benefits in its first year, launching an Online Fraud Charter and introducing a national public awareness campaign to make it easier for people to spot fraud.”