Up to £4.5billion of support scheme money lost to fraud, report says

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The Tories could have saved every UK household nearly £420 with the money they lost to fraud due to ‘flaws’ in their Covid support schemes, Labor has claimed (Dominic Lipinski/PA ) (PA Wire)

Billions of pounds granted under the covid employment scheme was lost for “fraud and error,” a new report said.

According to the analysis of the National Audit Office (NAO) £4.5billion, almost 4.6% of the total cost of the government’s £97billion Covid support package, was claimed in error.

The report goes further by saying that if the leave scheme prevented millions of job losses, “billions went to people whose incomes increased during the pandemic, and billions more were lost to fraud and error.”

Gareth Davies, the head of the National Audit Office, has called on the government to ensure it has the resources to tackle the problem in order to “crack down” any fraud.

The report adds: “While the numbers are highly uncertain, it is unlikely that large amounts of error and fraud will ever be recovered.

“Ministries will need to ensure they continue to fight fraud where it is cost effective to do so, and pursue the most serious cases to the full force of the law where it serves the public interest.”

Although the report estimates that £4.5billion was lost, it adds that there remains “considerable uncertainty” with estimates ranging from £3.2billion to £6.3billion.

While £5,900 was paid on average for each furlough job, an average increase of more than £2,200 was recorded in the benefits of self-employed people who received subsidies in 2020 and 2021.

In January, the Treasury minister responsible for efficiency, resigned over how government handled fraudulent Covid business loans.

Lord Theodore Agnew of Oulton told the House of Lords he was “unable” to carry out his role effectively.

“The monitoring by the Department for Business, Energy and Industrial Strategy and the British Business Bank of BBLS panel lenders has been nothing short of dismal.

“They were aided by the Treasury, which seems to have no knowledge or little interest in the consequences of fraud on our economy or our society,” he said.

“It is for this reason that I have unfortunately decided to tender my resignation as Treasury and Cabinet Minister with immediate effect.”

Commenting on the NAO’s findings, a government spokesperson said: “We are not ruling out any fraud from these schemes – our work to root out those who have abused the system continues.

“During this time, we have effectively minimized fraud from the start with compliance checks which have not unnecessarily delayed payments when needed and the additional compliance activities undertaken by HMRC have secured and protected more than one billion pounds.

“The NAO found that job support programs had achieved their primary goal of protecting jobs and businesses, with unemployment peaking at just 5.2 percent.”

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