More than £20,000,000,000 lost by government during pandemic due to fraud

Billions of pounds have been lost by the government due to fraud since the start of the coronavirus pandemic – and it’s ‘very unlikely’ to be recovered.

The National Audit Office (NAO) says around £21 billion has been lost in the two years since the pandemic began, which is almost four times more than the £5.5 billion lost in the two years before.

Of that eyewatering figure, slightly more than £7 billion relates to some of the schemes introduced by the government during the pandemic.

The NAO says many public bodies aren’t aware of the amount of fraud they face – and HMRC expects to only recover £1.1 billion of the cash lost by the time its taxpayer protection taskforce is wound down.

A report from the NAO found ‘most departments have only limited counter-fraud and corruption capability and cannot demonstrate that it is proportionate to their risk’, with the watchdog calling on departments and public bodies to act as ‘one government’ when tackling fraud.

Gareth Davies, head of the NAO, said: ‘There has been a substantial increase in the level of fraud reported in the annual reports and accounts we audit.

‘In addition to the loss of taxpayer money, it creates the risk that people come to perceive fraud and corruption across government as normal and tolerated.

‘If not tackled, this could affect public confidence in the integrity of public services.

‘Government has more to do to understand the scale of the problem it faces and cannot yet demonstrate that it is tackling fraud effectively.’

A new organisation, the Public Sector Fraud Authority, was set up last year to tackle fraud carried out during the pandemic – but the NAO says it needs to be ‘influential across government’ to make sure changes are made to preventative measures and risk assessments.

Labour’s deputy leader Angela Rayner said: ‘Fraud and corruption have run rife on the Tories’ watch but they are utterly failing to tackle it.

‘This government have completely abdicated their responsibility to crack down on this criminality, leaving public bodies without the resources to combat it effectively and protect the public’s money. It is a total dereliction of duty.

‘While fraud spreads like wildfire with billions of taxpayers’ money going missing, ministers are incapable of getting a grip and undermining public confidence further still.

‘While taxpayers are left counting the cost of the Conservatives, Labour has a plan to prevent fraud, punish the criminals and protect our communities.’

Recent government figures also show that more than 1.4 billion waste PPE items bought for the pandemic have been incenerated.

The stats, which cover items destroyed up to February 28 of this year, show 1,404,800,000 items including aprons, face masks and gloves have been destroyed.

A government spokesperson said: ‘We are overhauling how we tackle public sector fraud to ensure we chase down every pound stolen from British taxpayers.

‘Since 2021, we have invested more than £900 million in taking action on fraud and, as the report acknowledges, we have made progress by establishing the Public Sector Fraud Authority which is stepping up the government’s efforts to protect taxpayers’ money.

‘The Government has recovered more than £3.1 billion of fraud losses in the last two years, including within Covid-19 schemes, but we know there is more we can do.

‘That is why we are expanding the government’s counter fraud profession, developing new technologies and boosting skills and training to further protect the public purse.’

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