Wednesday, April 27, 2022
Tories still failing to tackle Covid fraud
The Guardian reports that MPs have criticised the government for its “unacceptable” failure to draw up plans to recover nearly £5bn taken from the coronavirus emergency bounceback loan scheme by fraudsters.
The paper says that a public accounts committee report has recommended that the government must give more resources to counter-fraud agencies and account properly for how much of the money will be lost forever:
In a package of measures developed under the chancellor, Rishi Sunak, the government focused its support for the economy at the start of the coronavirus pandemic on companies and people in work. The bounceback loan scheme (BBLS) was aimed at supporting small businesses, while the furlough scheme covered 80% of the wages of people unable to do their jobs.
However, the MPs said that the government was “complacent in preventing fraud” in particular in bounceback loans, which were given by banks but 100% guaranteed by the state – leaving taxpayers with the bill. An estimated £4.9bn of the £47bn spent on the BBLS was lost to fraud, while another £12bn has been lost via the scheme mainly through businesses collapsing during the pandemic.
Another £5.7bn is estimated to have been lost from fraud and error within the furlough and self-employment schemes, two of the other key support schemes during the crisis.
The business department and the state-owned British Business Bank, which managed the bounceback scheme through 24 commercial lenders, missed opportunities to reduce the level of fraud and are relying too much on the lenders recovering stolen money, MPs said.
Government officials understood the risks entailed in the design of the scheme, and obtained a ministerial direction to override the usual requirements on value for money.
Dame Meg Hillier, the Labour MP who chairs the committee, said: “With weary inevitability we see a government department using the speed and scale of its response to the pandemic as an excuse for complacent disregard for the cost to the taxpayer.
“More than two years on, [the business department] has no long-term plans to chase overdue debt and is not focused on lower-level fraudsters who may well just walk away with billions of taxpayers’ money.”
This sort of disregard for misuse of public money is unacceptable and needs to change.
The paper says that a public accounts committee report has recommended that the government must give more resources to counter-fraud agencies and account properly for how much of the money will be lost forever:
In a package of measures developed under the chancellor, Rishi Sunak, the government focused its support for the economy at the start of the coronavirus pandemic on companies and people in work. The bounceback loan scheme (BBLS) was aimed at supporting small businesses, while the furlough scheme covered 80% of the wages of people unable to do their jobs.
However, the MPs said that the government was “complacent in preventing fraud” in particular in bounceback loans, which were given by banks but 100% guaranteed by the state – leaving taxpayers with the bill. An estimated £4.9bn of the £47bn spent on the BBLS was lost to fraud, while another £12bn has been lost via the scheme mainly through businesses collapsing during the pandemic.
Another £5.7bn is estimated to have been lost from fraud and error within the furlough and self-employment schemes, two of the other key support schemes during the crisis.
The business department and the state-owned British Business Bank, which managed the bounceback scheme through 24 commercial lenders, missed opportunities to reduce the level of fraud and are relying too much on the lenders recovering stolen money, MPs said.
Government officials understood the risks entailed in the design of the scheme, and obtained a ministerial direction to override the usual requirements on value for money.
Dame Meg Hillier, the Labour MP who chairs the committee, said: “With weary inevitability we see a government department using the speed and scale of its response to the pandemic as an excuse for complacent disregard for the cost to the taxpayer.
“More than two years on, [the business department] has no long-term plans to chase overdue debt and is not focused on lower-level fraudsters who may well just walk away with billions of taxpayers’ money.”
This sort of disregard for misuse of public money is unacceptable and needs to change.
