At least £15,000,000,000 lost to Covid fraud and government mistakes

Billions of pounds of taxpayers’ cash intended to tackle the impact of Covid has been lost due to government failings, a damning report found.

At least £15billion was handed to fraudsters or paid out in error after No.10 ‘relaxed’ normal public spending rules at the start of the pandemic, according to a cross-party committee of MPs.

This includes loans for businesses, the Eat Out to Help Out scheme and furlough money, which alone led to £5.3billion in wrong payments.

In a report published on Tuesday, the Public Accounts Committee (PAC) said poor record-keeping and lack of transparency could mean the final total of ‘unacceptably high’ losses may never be known and lessons never be learned.

The report said: ‘Government estimates that losses due to fraud and error from the Coronavirus Job Retention Scheme alone will be £5.3 billion. The estimated loss due to fraud and error across all Covid-19 response measures is not known but is expected to be at least £15 billion.’

Dame Meg Hillier, who chairs the PAC, said future generations would be left to pick up the cost.

She said: ‘As the PAC has made clear across a series of reports on the costs of Covid, lack of preparedness and planning, combined with weaknesses in existing systems across government, have led to an unacceptable level of mistakes, waste, loss and openings for fraudsters which will all end up robbing current and future taxpayers of billions of pounds.

‘IIt is essential that for as long as we will be paying the costs of Covid-19, which is at least the next 20 years just in some of the loan repayment terms, the Treasury and all of Government continue to account specifically for what it has spent in response to the pandemic.’

The National Audit Office’s Covid cost tracker estimates that as of September 2021, the government spent £261 billion on Covid relief measures. That figure is expected to soar to £370 billion by the time the help packages come to an end.

Last month a senior Tory dramatically resigned over the government’s ‘woeful’ efforts to stop abuse of the pandemic support schemes

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Treasury minister Lord Agnew tore into ‘school boy errors’ in the government handling of fraud and was applauded as he walked away from the dispatch box.

It followed reports the Treasury had written off £4.3 billion of money stolen from its emergency Covid-19 schemes.

Documents released by HM Revenue and Customs in January said that some £5.8billion has been criminally siphoned off from furlough and other business relief schemes since the pandemic struck.  

A taskforce set up to get the money back has so far got its hands on around £500million, and is projected to receive a further £1billion by the end of 2023.

But questions remain over the fate of the remaining amount, with a report in the Times suggesting it could simply be ignored.

The PAC’s report said that out of £129billion given out in Covid loans, an estimated £21billion is also expected to be written off due to fraud and error.

The treasury said no fraudulent payments had been written off and it expected to recover up to £1billion from them.

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