£3bn lost to furlough fraud, says NAO

More than £3bn in Coronavirus Job Retention Scheme (CJRS) money has reportedly been lost to fraud. 

According to the National Audit Office (NAO), the government scheme to protect jobs and support businesses financially during the COVID-19 pandemic was developed too quickly and was left open for “considerable levels of fraud and error.”

In September HMRC’s assumption was that fraud and error could range from 5-10% on CJRS, equating to upwards of  £3.9bn, it is believed that some employers committed furlough fraud by keeping employees working in lockdown, against the rules of the scheme, or by claiming payments and not passing them on to employees in full. 

The CJRS scheme supported 9.6 million jobs and, at its peak in May, around 30% of the UK workforce was furloughed, HMRC’s fraud hotline has received over 10,000 reports, many referring to cases where employees worked despite their employer claiming for them as furloughed staff. 

The HMRC stated it will not know the actual levels of the crimes committed  “until the end of 2021 at the earliest”.

Gareth Davies, the head of the NAO said: “HM Treasury and HMRC met their objective to rapidly implement the schemes and the civil service should be commended for making these available ahead of schedule. 

“Indications are that the schemes helped to protect jobs in the short-term, but it is also clear that many other people have lost earnings and have not been able to access support.”

He added: “HMRC could have done more to make clear to employees whether their employer was part of the furlough scheme.

“In future, the Departments should do more while employment support schemes are running to protect employees and counter acts of fraud.”