Billions of pounds awarded as part of the Covid employment scheme was lost to “fraud and error”, a new report has stated.
According to analysis from the National Audit Office (NAO) £4.5billion, which is nearly 4.6 per cent of the total cost of the £97billion Government Covid support package, was claimed in error.
The report goes further to say that while the furlough scheme prevented millions of job losses, “billions went to people whose incomes increased during the pandemic, and billions more was lost in fraud and error”.
Gareth Davies, the National Audit Office head, called on the Government to ensure it has the resources to tackle the issue in order to “bear down” on any fraud.
The report adds: “While the figures are highly uncertain, large amounts of error and fraud are unlikely ever to be recovered.
“The departments will need to ensure they continue to bear down on fraud, where it is cost-effective to do so, and pursue the most serious cases with the full force of the law where it serves the public interest."
Although the report estimated that £4.5billion has been lost, it added there remains “considerable uncertainty” with estimates ranging from £3.2billion to £6.3billion.
While £5,900 was paid on average to every furloughed job, an average increase of more than £2,200 was recorded in the profits of the self-employed who received grants in 2020 and 2021.
In January, the Treasury minister responsible for efficiency, resigned over how the Government handled fraudulent Covid business loans.
Lord Theodore Agnew of Oulton told the House of Lords he was “incapable” of carrying out his role effectively.
“The oversight by both Department for Business, Energy and Industrial Strategy and the British Business Bank of the panel lenders of BBLS has been nothing less than woeful.
“They have been assisted by the Treasury, who appear to have no knowledge or little interest in the consequences of fraud to our economy or our society,” he said.
“It is for this reason that I have sadly decided to tender my resignation as a minister across the Treasury and Cabinet Office with immediate affect.”
Commenting on the NAO’s findings, a Government spokesman said: “We are not writing off any fraud from these schemes - our work to root out those who abused the system is ongoing.
"Meanwhile, we effectively minimised fraud from the start with compliance checks that did not unnecessarily delay payments when they were needed and further compliance activity undertaken by HMRC has secured and protected more than £1billion.
"The NAO found that the employment support schemes achieved their primary aim of protecting jobs and businesses, with unemployment peaking at just 5.2 per cent."
