Committee publication · Correspondence · 12 March 2026

Letter from the Director General Public Spending at HM Treasury relating to the Committee’s evidence session on 29 January 2026 on Government Use of Data Analytics to Tackle Fraud and Error, 27 February 2026

Inquiry: Tackling fraud and error in benefit expenditure 2024-25

Summary

The Director General of Public Spending at HM Treasury responds to a PAC question about why Confirmation of Payee (CoP) account-name verification is not universally required across government payments. He explains that BACS, which accounts for over 85% of government payments, is the prescribed method under Managing Public Money, and that departments retain discretion to implement fraud controls based on risk and cost. Treasury will conduct a cross-government stocktake of payee validation practices.

Key findings

Confirmation of Payee (CoP) is mandatory for Faster Payments and CHAPS but not BACS, which represents over 85% of government payment values and is the prescribed method under Managing Public Money
CoP primarily mitigates Authorised Push Payment (APP) fraud on one-off transfers; BACS is designed for high-volume planned disbursements with different fraud risk profiles
Departmental Accounting Officers retain discretion to choose fraud-mitigation measures, including CoP-type external validation services or alternative controls such as supplier onboarding and post-payment analytics
Extent of CoP usage across government is not currently quantified; Treasury will lead a cross-government stocktake of payee validation practices with support from the Public Sector Fraud Authority

Tone

Procedural

Topics

public-financefraud-preventiongovernment-operationspayment-systems

Key actors

Conrad Smewing, HM Treasury, Public Accounts Committee, Government Finance Function, Public Sector Fraud Authority, HMRC, Departmental Accounting Officers

Notable line

“… payments and is the most widely used payment method in government, accounting for over 85% of the value of payments made to recipients outside central government …”

Key Quotes

“CoP helps prevent fraud and misdirected payments by checking the entered account details against the receiving bank's records and the central CoP register.”
— Conrad Smewing · explaining how Confirmation of Payee operates

“Managing Public Money (MPM) prescribes BACS as the preferred government payment method reflecting its strong value for money, suitability for high ‑ volume planned disbursements …”
— Conrad Smewing · justifying government's reliance on BACS over other payment systems

“Overall, it is for departmental Accounting Officers to decide which fraud ‑ mitigation measures to use …”
— Conrad Smewing · clarifying departmental discretion in fraud control implementation

“I will instruct the Government Finance Function, supported by Public Sector Fraud Authority, to lead a short cross government stocktake of current departmental practices to assess where additional guidance or standards on payee validation and related controls may be warranted.”
— Conrad Smewing · committing to action in response to PAC question

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Source · parliament.uk record ↗