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UK must do more to recoup billions of pounds of COVID fraud – lawmakers say

© Reuters. FILE PHOTO: British Chief Secretary to the Treasury Simon Clarke and Minister of State for Crime and Policing Kit Malthouse walk outside Downing Street in London, Britain February 8, 2022. REUTERS/Tom Nicholson/File Photo

By Andrew MacAskill

LONDON (Reuters) – Britain’s government is failing to put enough effort into finding fraud in some of its COVID-19 support programmes as taxpayers face losing at least 4 billion pounds ($5.43 billion) to criminals and mistakes, a parliamentary report said.

The Public Accounts Committee, which scrutinises state spending, said the lenient approach will encourage future criminal activity because the government risks “rewarding the unscrupulous” and officials seen to be “soft on fraud”.

After coronavirus shut much of the British economy in early 2020, the government provided hundreds of billions of pounds to businesses, hoping to keep them and their staff afloat. At the time, the government described the support as one of the most significant economic interventions in British history.

The Coronavirus Job Retention Scheme, widely known as furlough, cost 70 billion pounds – the most expensive single piece of UK economic support during the pandemic. At its peak, the programme paid a third of British workers’ wages.

The government also spent 28.1 billion pounds on a parallel scheme for the self-employed and 840 million pounds offering discounted meals at restaurants, cafes, and pubs.

But the government has since found that some employers claimed money for workers who did not exist, and others took cash while their staff continued to work.

The committee criticised the government’s “unambitious” plans to only recover about 2 billion pounds of the estimated 6 billion pounds lost to criminals or given out incorrectly.

“Every taxpayers’ pound lost to a fraudster will lead to honest ordinary people feeling the post-pandemic pinch harder and harder,” said Meg Hillier, chair of the committee. “With the current parlous state of the public finances we can ill-afford to be so cavalier over so much taxpayers’ money.”

A government spokesperson rejected many of committee’s statements and said the support was created quickly to support people in desperate need. He said no fraudulent payments have been written off and the government was taking action to recover over-payments.

“The vast majority of payments in the schemes were made correctly to employers, and most error and fraud was legitimate claimants making mistakes or inflating their claims, often small per case,” the spokesperson said.

“The cost of inaction would have been far greater than the cost of fraud and error in the support schemes.” 

But Theodore Agnew, a junior minister who was responsible for government efforts to counter fraud, resigned in protest last month. He said the oversight of a separate business loan programme was “nothing less than woeful” and accused the government of making “schoolboy errors”.

Britain’s public spending chief last month urged those who swindled billions of dollars of COVID support money from the state to give the cash back.

“We will now pursue anybody who has taken this money fraudulently,” Chief Secretary to the Treasury Simon Clarke said. “And I would urge anyone who’s taken that money and didn’t really need it to make contact.”

UK must do more to recoup billions of pounds of COVID fraud – lawmakers say

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