Much of £10.9bn Covid scheme fraud ‘past restoration’, report says | EUROtoday

Much of the £10.9bn in taxpayer cash misplaced to fraud and error in Covid assist schemes is now “beyond recovery”, a report has mentioned.

The response to the pandemic had led to “enormous outlays of public money which exposed it to the risk of fraud and error” with many organisations unprepared, the Covid Counter Fraud Commissioner, Tom Hayhoe, mentioned.

Employment assist schemes arrange by the earlier Conservative authorities, together with furlough and assist for the self-employed, suffered £5bn of fraud, the report discovered.

Many of the assist measures have been credited with propping up the economic system all through the Covid lockdowns. However, Mr Hayhoe mentioned the “outrage” at fraud, abuse and error was “undiminished”.

Mr Hayhoe had been requested by Chancellor Rachel Reeves to research the quantity of public cash misplaced to fraud given his expertise in procurement as the previous chair of an NHS belief.

His report mentioned weak accountability, dangerous high quality information and poor contracting have been among the many causes for the losses.

Most public our bodies have been unprepared for “a crisis that required spending on such a scale and with such urgency”.

“Consequently, some measures to protect against potential fraud were inadequate.”

This utilized to the procurement of Personal Protective Equipment (PPE) the place the amount of orders “overwhelmed the newly created supply chain and involved measures that invited mistrust, opportunism and profiteering”.

It discovered £13.6bn was spent on PPE procurement, with 38 billion objects bought – though 11 billion have been unused by 2024. Losses have been estimated at £10bn from over-ordering and £324m of fraud.

The assist for small companies was additionally criticised, the place “lending relied on self-certification with inadequate checks to prevent abuse”.

It mentioned the design of the Bounce Back Loan Scheme “created specific vulnerabilities to fraud and error”, with the programme estimated to have incurred fraud and error losses of as much as £2.8bn.

Of the entire estimated quantity misplaced to fraud and error, the report mentioned £1.8bn had been recovered. However, it added: “Much of the shortfall is now beyond recovery.”

The report famous that the necessity to design and implement assist rapidly for companies got here with dangers.

“It was accepted in many schemes that the rapid design entailed accepting a high level of fraud risk, without plans for managing or mitigating this risk.”

Responding to the report, Chancellor Rachel Reeves mentioned: “Leaving the front door wide open to fraud has cost the British taxpayer £10.9bn – money that should have been funding our public services, supporting families, and strengthening our economy.

“We have began returning this cash to the British individuals and we’ll go away no stone unturned in rooting out the fraudsters who profited from pandemic negligence.”

In September the government launched a voluntary repayment scheme for people and businesses to return pandemic scheme money with no questions asked until the end of December.

A earlier report from Mr Hayhoe had discovered that pandemic-era PPE contracts price the British taxpayer £1.4bn on undelivered contracts and unusable robes, masks and gloves. Only a small fraction of that – £400m – has been recovered.