Wednesday, December 10, 2025
Covid fraud under the Tories cost the taxpayer £10.9 billion
Hayhoe's report says that the response to the pandemic had led to "enormous outlays of public money which exposed it to the risk of fraud and error", with employment support schemes set up by the previous Conservative government, including furlough and help for the self-employed, suffering £5bn of fraud:
Many of the support measures were credited with propping up the economy throughout the Covid lockdowns. However, Mr Hayhoe said the "outrage" at fraud, abuse and error was "undiminished".
Mr Hayhoe had been asked by Chancellor Rachel Reeves to investigate the amount of public money lost to fraud given his experience in procurement as the former chair of an NHS trust.
The near £11bn lost to fraud and error is close to what the government spends on the UK's justice system. The report said £1.8bn had been recovered, although: "Much of the shortfall is now beyond recovery."
However, it added that there were still areas "where investing in recovering money paid out incorrectly is worthwhile and work should continue".
The report said weak accountability, bad quality data and poor contracting were among the main reasons for the losses.
Most public bodies were unprepared for "a crisis that required spending on such a scale and with such urgency".
"Consequently, some measures to protect against potential fraud were inadequate."
This applied to the procurement of Personal Protective Equipment (PPE) where the volume of orders "overwhelmed the newly created supply chain and involved measures that invited mistrust, opportunism and profiteering".
It found £13.6bn was spent on PPE procurement, with 38 billion items purchased - although 11 billion were unused by 2024. Losses were estimated at £10bn from over-ordering and £324m of fraud.
The support for small businesses was also criticised, where "lending relied on self-certification with inadequate checks to prevent abuse".
It said the design of the Bounce Back Loan Scheme "created specific vulnerabilities to fraud and error", with the programme estimated to have incurred fraud and error losses of up to £2.8bn.
The report acknowledges that the schemes were designed and rolled out at speed but Mr Hayhoe says that fraud prevention should be more embedded into future disaster responses.
What adds to the feeling of outrage about this lost cash is that in many instances it was facilitated by people who should know better, through fast track VIP streams that failed to deliver.
That was the main reason, in my view, why pandemic-era PPE contracts cost the British taxpayer £1.4bn on undelivered contracts and unusable gowns, masks and gloves, with only a small fraction of that - £400m - having been recovered.
The government must continue to try and recover this money, while ensuring that lessons are learnt for the future.
