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Covid fraud and error losses could reach £15bn

The Coronavirus Job Retention Scheme alone is estimated to lose £5.3bn to fraud and error, which is 8.7% of the funding distributed through the scheme

The estimated loss to fraud and error across all Covid-19 response measures is expected to reach at least £15bn across the schemes and loans implemented by HM Revenue and Customs, the Department for Work and Pensions and the Department for Business, Energy and Industrial Strategy.

According to the Public Accounts Committee (PAC), the Coronavirus Job Retention Scheme alone is estimated to lose £5.3bn to fraud and error, which is 8.7% of the funding distributed through the scheme.

Overall, the UK government has spent £261bn on 374 measures in response to the pandemic, which are expected to cost a total of £370bn over their lifetime. This includes up to 10 years in the repayment term of the Bounce Back Loan Scheme (BBLS) and 20 years in the Cultural Recovery Fund.

The PAC said it is concerned that HM Treasury does not plan to distinguish the cost of Covid from departments’ business-as-usual spending in future, and that the government needs to maintain accountability for public money and transparency over what is being spent. 

Dame Meg Hillier MP, chair of the PAC, said: “As the PAC has made clear across a series of reports on the costs of Covid, lack of preparedness and planning, combined with weaknesses in existing systems across Government, have led to an unacceptable level of mistakes, waste, loss and openings for fraudsters.

“It is essential that for as long as we will be paying the costs of Covid-19, which is at least the next 20 years just in some of the loan repayment terms, the Treasury and all of Government continue to account specifically for what it has spent in response to the pandemic.”

She added: “Government must be held accountable in this way to all the future taxpayers who will be paying for this response. Crucially this must ensure lessons are learned for when the next big crisis hits – be it climate, health or financial.”

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