The taxman is shutting down its fraud-busting Covid taskforce despite failing to recover at least £3.4billion in fraud and error.
HM Revenue and Customs says its specialist team of 1,250 officials, who are working to get back taxpayer cash, will begin winding down in March.
The Taxpayer Protection Taskforce will be closed down completely by September.
It comes as HMRC has almost halved the amount of money it expects to recover from a goal of £2billion to £1.1billion.
An estimated £4.5billion was lost to fraud and error from the furlough scheme, a similar scheme for the self-employed and Eat Out To Help Out.
Labour ’s shadow chancellor Rachel Reeves said: "This tells you all you need to know about how seriously the Tories take the fraud that has happened under their watch.
“The government left the till open to fraudsters and criminals and billions of pounds of hard earned taxpayer money was lost.
“Not only did they fail on basic checks that were meant to stop this kind of criminal loss happening, but they seem to be giving up altogether on clawing any of it back from fraudsters by winding down this task force.
“This really is a badge of shame for this Prime Minister - and flies in the face of working people, already paying the price for the Tory economic mess we’re in."
The National Audit Office has warned that “straightforward measures” to tackle fraud were not introduced until months after the Covid business support schemes were launched.
When Mr Sunak was chancellor, Lord Agnew quit as a Treasury minister over the government’s “desperately inadequate” efforts to stop taxpayers’ money being stolen and blasted the “school boy errors”.
In the Tory leadership race in the summer, Kemi Badenoch raised Mr Sunak’s record on fraud in the ITV debate.
“When we both worked in the Treasury, myself and other ministers raised the issue of Covid loan fraud and you dismissed us,” she told him. “Why didn’t you take us seriously?”
The HMRC said: “We certainly will not be stopping doing compliance work on Covid error and fraud. We will continue doing that, although the dedicated taskforce will no longer be organised in that way. We will continue picking up those risks as part of our business-as-usual compliance work.”
