Public sector fraud professionals upbeat about scale of potential savings for the exchequer, SAS study reveals

New research reveals AI-powered fraud is on the rise while public trust erodes - but only 1 in 10 public sector professionals feel fully equipped to respond.

A new study commissioned by data and AI leader SAS, conducted by Coleman Parkes, has found that UK public sector fraud professionals believe, on average, that up to 19% of government budgets could be saved by tackling fraud, waste and abuse - an indication of the scale of ambition across departments.

Nearly two-thirds (63%) globally think savings of more than 10% are achievable and nearly four in 10 (38%) believe they could exceed 20% - provided they have the tools, skills and investment to act. Despite this, just 10% of UK respondents feel they have all the tools and resources needed to fight fraud effectively.

This comes at a key moment for the UK, just days after the Budget which acknowledged growing pressure to find efficiencies and cost savings across government. The research suggests professionals on the frontline aren’t saying “we can’t”, they’re saying “we could, if we’re properly equipped.”

SAS’ own experience also supports the scale of opportunity. Based on a large UK government infrastructure project it was involved in, the company estimates that up to 5% of all public sector procurement - around £20 billion annually - may be at risk. While not all of this is recoverable, SAS believes 1% represents a credible level of realisable savings with the right systems and safeguards in place.

Official UK figures from the National Audit Office (NAO) put the cost of fraud and error to taxpayers at £55-81bn in 2023/24, around 4-7% of total government spending, underlining both the scale of the challenge and the opportunity to recover significant sums.

These findings come as the UK Government advances its AI strategy through several major initiatives, including the AI Opportunities Action Plan published in January 2025 and the Government Digital and AI Roadmap set for summer 2025 - both emphasising public sector innovation, efficiency and modernisation.

The survey, which canvassed over 1,300 public sector fraud professionals across Europe, the Americas and Asia Pacific, including 100 respondents from the UK, also found that fraud is undermining public trust and stretching resources thin. Nearly every respondent (99%) ranked fraud prevention as a top 10 organisational priority, with over a third in the UK naming it their number one concern.

“Governments are facing a dual challenge: rising fraud threats and falling public trust,” said Pete Snelling, Senior Manager Fraud & Compliance at SAS UK. “Our research confirms that AI-driven fraud is growing rapidly, but it also highlights the urgent opportunity to turn the tide. With the right tools and skills, departments can not only prevent losses but restore confidence in public institutions.”

Payment fraud and identity fraud are currently the most common types experienced by public departments, and they’re also expected to grow significantly in the next five years. Notably, AI-powered fraud schemes have surged, with two-thirds of UK respondents reporting an increase.

In the UK, citizen tax fraud was cited as the most prevalent threat after payment fraud, with procurement fraud and VAT fraud also flagged as a growing concern.

While AI and predictive analytics are already used by 40% and 52% of UK departments respectively, widespread implementation is hampered by structural barriers. The top challenges according to respondents include responsible use of AI and analytics (46%), integration with existing systems (43%), privacy and security concerns (42%) and limited budgets (35%).

Nearly all departments in the UK plan to adopt AI or GenAI within two years if they aren’t using them already. Synthetic data is most used today, but the anticipated uptake of natural language processing is set to rise fastest. In the UK AI already boosts workforce efficiency (68%), drives better prioritisation of cases (47%), improves speed of detection (36%) and leads to fewer false positives (30%).

“There’s huge enthusiasm for AI, but also very real obstacles,” added Snelling. “Governments want to act, but they’re often hamstrung by outdated systems, siloed data and lack of capacity. At SAS, we’re focused on closing that gap with powerful analytics that are also accessible and scalable.”

The impact of fraud goes beyond finances. An overwhelming 96% of UK respondents said it has negatively affected citizen trust, with nearly one in five describing the impact as severe. Maintaining public trust was the top reason departments gave for prioritising fraud prevention, outranking even protecting their reputation or regulatory compliance.

SAS has worked with public sector organisations for decades to help uncover fraud and improve operational efficiency through data and AI. From real-time transaction monitoring to generative AI and predictive modelling, SAS solutions are helping governments detect more, detect faster and respond smarter.

Read the full report entitled Data, trust and accountability: Tackling fraud in the UK public sector.

Methodology

SAS commissioned Coleman Parkes to undertake a survey of 1,300 public sector fraud professionals across Europe, the Americas and Asia Pacific, including 100 respondents from the UK, to uncover their fraud challenges and priorities. The audience group was a mix of senior and lower-level roles responsible for monitoring fraud, waste and abuse within their organisation. The research took place in Q1 and Q2 2025.

ENDS