Does the UK have a corruption problem? Officially, no. In reality, we just don’t know, says a document from the Fraud Advisory Panel. Domestic corruption risks in areas such as business, education, local government and elections are neglected and poorly understood because officials focus on bribery overseas, warns the Panel, a charity, in its report, Hidden in plain sight: domestic corruption, fraud and the integrity deficit.
The 20-page report points out that crimes done overseas grab all the headlines and resources, while data on domestic corruption are not collected systematically, let alone analysed. There is no dedicated infrastructure or single agency in the UK responsible for taking the lead in policing domestic corruption. Everyday practices like revolving doors, nepotism, ‘self-regulation’ and excessive ‘hospitality’ – while not strictly illegal – work by stealth to divert resources and opportunities, concentrate power and advantage, and corrode trust.
The neglect of domestic corruption risks sits uncomfortably with everything else we know about the epidemic of economic crime in the UK, says David Clarke, chairman of the Panel.
“With most types of economic crime rampant, why would corruption be the exception? If UK companies commit bribery overseas, why would nothing similar occur at home? We add our voice to the growing chorus demanding a clear and positive commitment to ethical politics and business, both at home and abroad. Corruption isn’t a single event or act; it is a process whose ultimate objective is to create a culture in which it can become the new normal. Everywhere we look in Britain today we see signs that just such a culture is beginning to take root.”
The document complains that far too little thought is given to the fraud and corruption-related risks created by central government policy. For example, pensions liberalisation ‘unleashed a bonanza for fraudsters selling bogus investment schemes’, the Panel says. Conflicts of interest and what the document terms their close relation, the revolving door, have become a way of life in the UK, the Panel says; ‘a routine part of the career and (semi) retirement plans of legions of public servants. They are also the fundamental flaw at the heart of our national preference for so-called ‘self-regulation’.’
As for market sector, the Panel says of ‘claims farming’ that the secondary market for insurance claims has ‘been a breeding ground for potential corruption’; UK construction is ‘far from immune’; and since 2010 the large-scale conversion of local authority schools into academies ‘has brought with it corruption risks previously unheard of in education’.
Bacakground
For the full document, visit the Panel website. The Panel was founded in 1998 by the Chartered Accountants’ body the ICAEW. Visit www.fraudadvisorypanel.org.
