Only £10m of £2.2bn in fraudulent Covid loans recovered

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by Melissa Lawford at

The Business department has recovered just £10m of the £2.2bn of taxpayers’ money lost in a black hole of fraud and mistakes surrounding Covid support schemes, according to the Government’s spending watchdog.

The department’s “laissez-faire” approach put public money at risk and is “effectively writing off” nearly £1bn which was paid out erroneously by local authorities on its behalf, the Public Accounts Committee (PAC) warned.

It said that of the estimated £2.2bn lost via fraud and errors on pandemic schemes such as the Bounce Back Loan (BBLS), the Government has claimed back just 0.45pc, or £10m, according to the committee’s annual report and accounts for the Department of Business, Energy and Industrial Strategy (BEIS).

Dame Meg Hillier, the PAC’s chair, said: “At a time of financial crisis, the department for business has lost billions of taxpayers’ desperately needed funds.

“It shows no real signs of making the improvements that would prevent the big mistakes it has made over many years, especially during the pandemic, happening all over again.”

Of the £2.2bn in lost funds, an estimated £985m was lost through erroneous local authority grant payments made in the first wave of Covid support.

This was because the first wave of grants were not application-based but were paid directly to businesses by councils, according to their ratepayer databases, which included major inaccuracies. The Department believes this money cannot be recouped because the payments did not involve deliberate fraud and the businesses were struggling.

The National Investigation Service, which has been given £13.2m in funding to recover money lost in fraud and error on Covid business support schemes, has clawed back just £5.8m so far.


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