Construction fraud hits eight-year high
Fraud in the construction sector has hit an eight-year high, according to new research.
Accountancy and business advisory firm BDO’s Fraud Track report, which examines all reported fraud over £50,000 in the UK, found that fraud within construction firms soared by almost £6m from £2.6m (2017) to £8.3m (in 2018).
That takes the value of reported fraud in the sector to its highest level since 2010.
The increase of fraud in the construction industry bucks the national trend; overall UK reported fraud more than halved in 2018 – down from £2.1bn to £746.3m.
Kaley Crossthwaite, head of fraud at accountancy firm BDO, said: “With rising economic pressures and the continuing sophistication in technology, detecting fraud – and more importantly, preventing it - is an acute and contemporary risk for many.
“Although cover pricing and bid rigging has been brought to the forefront due to some high-profile CMA investigations, employee and third-party fraud is, as always, a major contributor to this year’s figures. Businesses should put in place greater training, controls and monitoring of those who have access to critical business and financial information. Better self-policing, strong whistle-blowing policies and developing a culture of transparency across all levels of the organisation are good first steps to take to help tackle fraud and corruption in the industry.
“I would urge businesses to be vigilant, particularly as the general economic outcome is uncertain. All businesses should have a plan in place to deal with fraud from discovery to recovery.”