Billions lost 'fraud and error' in the furlough scheme

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The furlough scheme introduced by the government to help people and businesses financially during the pandemic has seen billions lost, through fraud and error. According to a Commons Public Accounts Committee, the UK Government’s response to the pandemic “has exposed the taxpayer to substantial financial risks from fraud and error” and it does not know the exact amount but estimates it to be £5.3bn, which is 8.7% of the scheme’s total spend.
The total cost to the exchequer through all Covid-19 loans and schemes is closer to 15 billion, with HM Revenue & Customs, the Department for Work & Pensions, and the Department for Business, Energy & Industrial Strategy all having been party to the losses.
The report reads: “Government estimates that losses due to fraud and error from the Coronavirus Job Retention Scheme alone will be £5.3bn. The estimated loss due to fraud and error across all Covid-19 response measures is not known but is expected to be at least £15bn across measures implemented by HM Revenue & Customs, the Department for Work & Pensions, and the Department for Business, Energy & Industrial Strategy. The total cost across government remains uncertain and could be higher because of the long loan repayment terms.”
An update in September 2021 found the government had spent £261bn on 374 measures in response to the pandemic. The measures are expected to cost a total of £370bn over their lifetime.
The committee said it was concerned that the Treasury “does not intend to adequately monitor and update the ongoing cost of Covid-19 to the taxpayer” and does not yet know how much money has been lost due to fraud and error and has not said how it will learn lessons.
“As the UK recovers from the pandemic it is more vital than ever that government maintains accountability for public money and transparency over what is being spent. HM Treasury plans to review and update the costs associated with the Covid-19 loan schemes and some public service measures where these can be reliably attributed to Covid-19 but has not committed to continuing to update all the data currently captured in the cost tracker. We are concerned by the extent of costs that may be excluded by this method and that HM Treasury does not currently plan to distinguish the cost of Covid-19 from departments’ business-as-usual spending in future. Both of these hinder the opportunity for Parliament and the public to scrutinise the ongoing cost of the pandemic.”
It was also going to cost the government to keep the economy afloat and to help the man in the street during the pandemic, however it is not acceptable to lose billions through fraud and error especially when that will have to be recovered in taxes from those who were not guilty or complicit.

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Written by

Peter McLaren-Kennedy

Originally from South Africa, Peter is based on the Costa Blanca and is a web reporter for the Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]