A final report on Covid-19 fraud has revealed that taxpayers lost £10.9 billion to fraud and error in pandemic support schemes – with the vast majority now deemed unrecoverable. Only £1.8 billion has been clawed back, and Covid Counter Fraud Commissioner Tom Hayhoe warned that «much of the shortfall is now beyond recovery».
The report, commissioned by Chancellor Rachel Reeves, identifies the Eat Out To Help Out scheme and Bounce Back Loans as particularly vulnerable programmes. Employment support schemes alone – including furlough and self-employed help – accounted for £5 billion in losses.
Reeves placed blame squarely on the previous Conservative government. «Leaving the front door wide open to fraud has cost the British taxpayer £10.9 billion – money that should have been funding our public services, supporting families, and strengthening our economy», she said. She pledged to «leave no stone unturned in rooting out the fraudsters who profited from pandemic negligence».
Why controls failed
The report found that the pandemic response required «enormous outlays of public money which exposed it to the risk of fraud and error». Most public bodies were unprepared for the crisis, leading to inadequate fraud protection measures.
Controls were rushed and often absent. The report noted that rapid programme design meant «accepting a high level of fraud risk, without plans for managing or mitigating this risk». PPE procurement «overwhelmed the newly created supply chain and involved measures that invited mistrust, opportunism and profiteering». The government spent £13.6 billion on 38 billion PPE items – with 11 billion still unused by 2024.
The Bounce Back Loan Scheme proved especially problematic. Lending «relied on self-certification with inadequate checks to prevent abuse», creating losses of up to £2.8 billion. Previous Hayhoe findings showed pandemic-era PPE contracts cost taxpayers £1.4 billion in undelivered or unusable equipment, with only £400 million recovered.
Recovery efforts continue
Despite the bleak assessment, the report identifies areas «where investing in recovering money paid out incorrectly is worthwhile and work should continue». The government launched a voluntary repayment scheme in September, allowing individuals and businesses to return pandemic funds without inquiry until the end of December.
Hayhoe acknowledged that public «outrage» at the fraud, abuse and error remains «undiminished». The programmes were introduced by Boris Johnson's Conservative government to support UK firms and workers during the pandemic.
Note: This article was created with Artificial Intelligence (AI).
