The Government has been slow to take action to recover losses to error and fraud in covid grant schemes of over £1 billion, according to the cross-party the Public Accounts Committee of MPs in a report. Three years on from the provision of £22.6 billion in business support schemes in the pandemic, the Government had, by May 2023, recovered £20.9m, or two per cent, of an estimated £1.1 billion in fraud and error losses.
The committee’s chair, the London Labour MP Dame Meg Hillier, said: “The Government must not wait for the conclusions of the covid inquiry to learn the lessons laid out in this report. Never again should a national emergency find policy being written as we go along, without firm planning and good local data, with local authorities not properly funded to work in partnership on the support required. The next emergency must find the Government rigorously prepared with an understanding of the optimal means to support businesses through difficult times.
“The lack of planning from Government also meant that a door was left wide open in these schemes to fraudsters who took shameful financial advantage of schemes that were designed with national solidarity in mind. It is simply not good enough to give up on recovering this money simply because it is difficult to do so. Public trust is harmed if the Government shrugs its shoulders at criminals lining their pockets with state support.”
The Department for Business and Trade (DBT) does not have definitive figures on the split between fraud and error within the schemes, the committee reported. “DBT told us the number of payments classified as fraud by local authorities were 8 pre cent of the total number of recovered payments it is aware of from local authority reporting, and 15pc by number based on a separate fraud and error survey of authorities commissioned by the Department.”
The MPs heard that £15m had been recovered by local authorities and £6m had been repaid to government voluntarily by large businesses. DBT also said that local authorities have referred a further £6m of irregular payments to government after being unable to recover them, and authorities are pursuing another £7m. DBT told the MPs that it is considering contacting the 40 per cent of councils that did not respond to its fraud and error survey.
For the full report, titled Local authority administered COVID support schemes in England, visit parliament.uk.
