Much Of £11bn Covid Scheme Fraud 'beyond Recovery', Report Says

Much of nan £10.9bn successful payer money mislaid to fraud and correction successful Covid support schemes is now "beyond recovery", a study has said.

The consequence to nan pandemic had led to "enormous outlays of nationalist money which exposed it to nan consequence of fraud and error" pinch galore organisations unprepared, nan Covid Counter Fraud Commissioner, Tom Hayhoe, said.

Employment support schemes group up by nan erstwhile Conservative government, including furlough and thief for nan self-employed, suffered £5bn of fraud, nan study found.

Many of nan support measures were credited pinch propping up nan system passim nan Covid lockdowns. However, Mr Hayhoe said nan "outrage" astatine fraud, maltreatment and correction was "undiminished".

Mr Hayhoe had been asked by Chancellor Rachel Reeves to analyse nan magnitude of nationalist money mislaid to fraud fixed his acquisition successful procurement arsenic nan erstwhile chair of an NHS trust.

The adjacent £11bn mislaid to fraud and correction is adjacent to what nan authorities spends connected nan UK's justness system. The study said £1.8bn had been recovered, although: "Much of nan shortfall is now beyond recovery."

However, it added that location were still areas "where investing successful recovering money paid retired incorrectly is worthwhile and activity should continue".

The study said anemic accountability, bad value information and mediocre contracting were among nan main reasons for nan losses.

Most nationalist bodies were unprepared for "a situation that required spending connected specified a standard and pinch specified urgency".

"Consequently, immoderate measures to protect against imaginable fraud were inadequate."

This applied to nan procurement of Personal Protective Equipment (PPE) wherever nan measurement of orders "overwhelmed nan recently created proviso concatenation and progressive measures that invited mistrust, opportunism and profiteering".

It recovered £13.6bn was spent connected PPE procurement, pinch 38 cardinal items purchased - though 11 cardinal were unused by 2024. Losses were estimated astatine £10bn from over-ordering and £324m of fraud.

The support for mini businesses was besides criticised, wherever "lending relied connected self-certification pinch inadequate checks to forestall abuse".

It said nan creation of nan Bounce Back Loan Scheme "created circumstantial vulnerabilities to fraud and error", pinch nan programme estimated to person incurred fraud and correction losses of up to £2.8bn.

The study acknowledges that nan schemes were designed and rolled retired astatine velocity but Mr Hayhoe says that fraud prevention should beryllium much embedded into early disaster responses.

Rachel Reeves welcomed nan study and said nan authorities would respond afloat successful nan caller year.

Speaking successful nan Commons, she criticised nan erstwhile Conservative government, saying they "played accelerated and loose pinch nan nationalist purse and near nan beforehand doors wide unfastened to fraud".

"This authorities will time off nary chromatic unturned, because that money belongs to taxpayers, not pinch cronies aliases crooks."

The Conservatives person been approached for comment.

In September nan authorities launched a voluntary repayment strategy for group and businesses to return pandemic strategy money pinch nary questions asked until nan extremity of December.

A erstwhile study from Mr Hayhoe had recovered that pandemic-era PPE contracts costs nan British payer £1.4bn connected undelivered contracts and unusable gowns, masks and gloves. Only a mini fraction of that - £400m - has been recovered.