The NHS is at risk of losing £1.35bn to fraud every year, it can be revealed. The health service warned that every pound lost is a pound that cannot be used to employ frontline staff, buy drugs, perform operations, or provide routine or emergency care.
Biggest risks identified
The biggest risk is procurement and commissioning fraud, which includes collusion, manipulated tenders, undeclared conflicts, inflated agency costs, and dodgy suppliers. Areas at greatest risk include prescription fraud — particularly weight-loss jabs — the misuse of NHS services by overseas patients, data manipulation, community pharmacy contractor fraud, GP contractor fraud, optical fraud, and employees falsifying shifts.
The NHS Counter Fraud Authority (CFA) revealed that nearly three-quarters of 1% of the entire NHS budget is vulnerable to bribery and corruption. It said: “Losses at this scale can mean fewer staff, such as doctors, nurses, healthcare assistants, porters and discharge staff working in hospitals. It can also mean older equipment, fewer outpatient appointments and fewer operations as every pound lost to fraudsters is a pound lost from patient care. Fraud, bribery and corruption can also mean unsafe care for patients.”
Potential liability exposed
Although the NHS thinks £1.35bn of annual spending — roughly 0.72% of its budget — is vulnerable to fraud, bribery and corruption each year, only a relatively small proportion is ever identified. The damning verdict is contained in the latest Strategic Intelligence Assessment (SIA), laying bare how the “healthcare landscape continues to evolve rapidly” and comes at a time when the knife is being taken to layers of management.
In the five years between 2019/20 and 2023/24, ministers confirmed £101m was lost to fraud. But the overall potential liability, as laid out in the SIA — equal to the annual running cost of a large hospital trust — has raised questions as to how fraud-proof Europe’s biggest employer is.
Budget timing and reforms
The revelation comes just two months before the Budget, with the CFA warning that the abolition of NHS England and its merger into the Department of Health and Social Care (DHSC), coupled with a requirement for Integrated Care Boards to slash costs by half, could affect procurement and commissioning processes. It means that at precisely the moment the NHS is reducing managerial and administrative capacity, it needs strong systems and controls to scrutinise enormous flows of money.
DHSC has set itself a target to prevent, detect or recover £600m between 2026-29, placing emphasis on analytics, AI, better risk assessment and designing fraud controls into systems rather than trying to recover money afterwards. But there is concern that thinking just accepts fraud will continue to grow, and investigators hope to catch more of it.
Former Health Secretary Sir Jeremy Hunt MP said: “The structures in the NHS mean there is not enough focus on careful use of money. Managers are hired and fired on the basis of monthly operational targets, and all too often, looking after taxpayers’ funds is an afterthought.”
Alex Rothwell, Chief Executive of the NHSCFA, said £1.35bn “could supply the NHS with so much - including doctors, nurses, ambulances and equipment to enable the NHS to move from analogue to digital, hospital to community and sickness to prevention - helping save lives and making a difference to people’s health.”
One insider told the Express: “The important figure isn't the amount of fraud the NHS catches. It is the amount of money it believes is at risk. The NHS budget is very stretched and currently growing as slowly as it did under 2010s austerity, all while trying to deliver ambitious reforms which range from improving access to GPs in poorer areas, to totemic pledges like reducing hospital waiting lists. So any avoidable waste, including from fraud, is still the last thing it needs during one of the toughest periods for funding in its history. Every pound lost through fraud is a pound that cannot employ somebody, buy a drug, perform an operation or provide care. The encouraging thing is that counter-fraud work appears to pay for itself many times over. So before the Treasury reaches for another efficiency target, it might first ask how much money is leaking out of the system and whether investing a little more in stopping it would save considerably more.”
Health Minister Baroness Gillian Merron said: "It is utterly despicable that criminals defraud the NHS - every pound stolen is money taken away from patients and the care they need. We have already prevented, detected and recovered more than £500m through tougher action, but we're going even further by harnessing the power of AI to spot and stop fraud before it happens. We will not tolerate criminals exploiting our health service. Money recovered from fraudsters will be reinvested in cutting waiting lists, improving patient care and building an NHS fit for the future."
David Williams, deputy director of policy at the NHS Alliance, said: “NHS organisations - like businesses and individuals - are sadly not immune to the risk of fraud, and at a time when the NHS budget is already very stretched, health services leaders know only too well how vital it is to make sure that every available pound is spent on improving performance and delivering first-class care.”
Prescription fraud and weight-loss jabs
Analysts say £230.2m is vulnerable to patients abusing the NHS through exemption fraud. Some services require payment upfront, notably prescriptions, dentistry and ophthalmology, but one area of concern is the onward sale or supply of prescribed medication. The prescription charge in England is £9.90, but an NHS Prescription Prepayment Certificate (PPC) costs £32.05 for three months or £114.50 for 12 months. The PPC covers all drugs for a set price, meaning massive savings if someone is dispensed more than three items in three months, or 11 items in 12 months.
The NHS Counter Fraud Authority (CFA) warns: “The onward trade of prescription medication for personal gain remains highly likely in this area. This can involve selling unwanted or unused medications as well as intentionally obtaining controlled medications via deception (by) feigning illness or injury to specifically obtain and sell prescribed items for profit, particularly in lucrative markets abroad. An emerging trend identified was the onward trade of prescriptions relating to weight-loss.” As many as 2 million Britons are on weight-loss drugs - so-called “fat jabs” - but the majority buy them privately because of strict eligibility rules. NHS weight loss medications include injections like tirzepatide (Mounjaro), semaglutide (Wegovy), and liraglutide (Saxenda), or tablets like orlistat, which are strictly prescription-only.
Theft of identity to register for NHS services or medication is “highly likely” the CFA warns, saying: “This modus operandi is most commonly linked to individuals who have entered the UK unlawfully using false identities, stolen identities or identities of their friends or family who have legal status in order to avoid detection. This is enabled by the misconception that they are not entitled to any NHS treatment without charge, or concerns that the NHS may pass their details to immigration enforcement. There have been several noted links in using repeated false identities or addresses to claim for state benefits, like Universal Credit, and claiming or registering for NHS services. Patient charge evasion remains highly likely in this area. This involves patients deliberately and intentionally avoiding charges for services which require payment in the NHS, like prescriptions, dentistry and optical costs. The NHS offers a low income scheme (LIS) as a means tested assessment for patients to demonstrate low income and gain an exemption for NHS charges. However, it is a realistic possibility that some patients withhold some information to qualify for the scheme.”
