MPs warn, Covid fraud losses could exceed £4.9bn IG News

MPs warn, Covid fraud losses could exceed £4.9bn

Lawmakers have warned that the “eye-watering” amount of lost taxpayer money to fraudsters taking advantage of COVID aid schemes could be even greater than previously feared.

The Department for Business, Energy and Industrial Strategy (BEIS) has estimated £4.9bn in losses from loans issued to ineligible businesses during the pandemic.

But the Public Accounts Committee said the total amount spent “could be even higher” with grants given to businesses through local authorities, losing undisclosed amounts due to fraud and error.

Labor MP Meg Hillier, chair of the committee, said the government had “presented an open target for fraudsters and embezzlers and they added billions and billions to the taxpayer’s woes”.

In a damning report, the committee said it was concerned that efforts to recover the lost funds would be in vain “as the money would have been spent and the trails would have become cold long ago”.

Chancellor Rishi Sunak has denied “ignoring” the Covid support scheme fraud, and promised the government “will do everything” to recover the money stolen by the fraudsters.

Lawmakers criticized BEIS officials, saying they “did not adequately recognize or reflect the potential risks from organized economic crime” – about billions lost to error and fraudsters from Covid loans.

Suitcases filled with cash from COVID loans were confiscated at the border as suspected embezzlers tried to take them out of the country, many times Reported last month.

The committee also found that the department disbursed £21.8 billion of COVID grants to businesses through local authorities, but still “lacks information on recipients” of this funding.

BEIS officials estimate the level of fraud and error in less than half of these grants – but more than £1bn is already expected to be lost.

MPs called on the government to determine how it would work with councils across the UK to calculate “robust” fraud and error estimates – and do more to recover wasted money.

The cross-party committee said it was “dissatisfied” that the department’s current plan to recover fraudulent money would act as a “substantial deterrent” to those considered to have committed fraud.

Ms Hillier said: “BEIS says it has seen this risk coming, but it’s not really clear where the government was looking when setting up its initial COVID response.”

The senior Labor MP said: “These mistakes should be written out of future crisis responses, and the government would do well to apply the learnings to the growing, interconnected crises of climate change, energy supply and cost of living. “

Lord Agnew stepped down as government’s efficiency tsar in January over handling of fraudulent Covid loans. He accused officials of committing “school error” by handing over money to more than 1,000 companies that didn’t do business at the start of the pandemic.

A government spokesperson said: “We are cracking down on COVID support scheme fraud and will not tolerate those who defraud consumers and taxpayers.

“These schemes were implemented with unprecedented speed to protect lakhs of jobs and businesses. If the government did not act quickly, more businesses would fail and many more jobs would be lost. ,

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