Companies in Hampshire are unnecessarily losing more than £89m a year, according to new research.
Figures released by procurement and efficiency experts blur Group reveal that £89.6m a year is estimated to have been lost to procurement fraud by businesses in Hampshire and a further £15.2m by the public sector in the county.
That includes £10.36m by businesses in Portsmouth and £11.13m by businesses in Southampton.
It is recognised that some 20 per cent of all spending by organisations is unmanaged and often un-contracted, and so at risk to procurement fraud.
Procurement fraud is any fraud relating to a company purchasing goods, services or commissioning construction projects from third parties. This is the second most frequently reported form of economic crime.
It includes rogue spending and deliberate bid rigging, when a commercial contract is promised to one party even though several other parties also present a bid for the sake of appearance.
These practices cause increased and unnecessary costs, reduced profits and ultimately higher prices and bills passed on to consumers and taxpayers.
blur Group CEO Philip Letts says: ‘The figures are shocking but Hampshire is not alone on this issue.
‘As well as private sector companies wasting millions of pounds of their own potential profit and operating under a tighter financial burden, a major aspect of procurement fraud falls within the public sector which means taxpayers’ money is being wasted too.
‘This part of an organisation’s spend is largely unmanaged, meaning many are not even aware that the issue is so prevalent.
‘At a time when councils are seeking greater financial responsibility through devolution from central government it is imperative this is addressed.’