The government’s failure to recover a billion pound Covid fraud beggars belief

Criminals have stolen £1.1bn – yes, billion – intended to prop up businesses during the pandemic. It’s an astonishing amount, but not nearly as amazing as the government’s lack of interest in getting it back, writes James Moore

(PA)

According to a former health minister, Boris Johnson’s government failed to get to grips with Covid because of an “ostrich, head-in-the-sand mentality” that gripped Downing Street. Apparently, according to Lord Bethell, Johnson was too worried about Brexit to take the arrival of a world-altering pandemic seriously.

The start of the pandemic may feel like a long time ago – but the head in the sand description remains apt when it comes to Covid, notably the huge sums of money lost to fraudsters through business support initiatives.

The House of Commons Public Accounts Committee has today issued a report into the fraudulant claims of Covid business funds. And the numbers are dizzying.

What is equally astonishing is the Department of Business and Trade’s response to the question of what’s being done to recover the money. The answer: not much. Because to recoup the cash would be “incredibly hard”.

Some £22.6bn of tax payers money – yours and mine – was made available through the business support schemes that operated during the pandemic. It may be churlish to quibble over that. Whole sectors of the UK economy were entirely shut down and money was needed to avoid an economic meltdown.

But the inevitable result was that some very bad actors took advantage. And how. Some £1.1bn is estimated to have been lost through fraud and errors. Nursing job site nurses.co.uk puts the average salary availalble to those in the job in 2023 in the range of £35,000 to £38,000. So let’s stick a pin in the middle. The money lost through fraud would, on that metric, be enough to pay for 27,400 nurses for a year.

The report finds that the government had, by May 2023, recovered just £20.9m of the wrong, or fraudulently, dispensed cash. Just over 2 per cent the total.

Members of the committee, a bipartisan affair as these committees are, challenged officials from the Department of Business & Trade as you would hope they would. The response? Checking payments is very expensive. There are legal questions about the ability to recover some payments. And it would be “incredibly hard” to recover the lost cash.

That’s right. A huge sum of money stolen from taxpayers, robbed from the budgets of cash-strapped schools, or hospitals, or local authorities with blackholes in their budgets like bankrupt Birmingham council, looks set to remain in the hands of thieves because recovering it would be “incredibly hard” to do anything about it.

We know the grants were made in a hurry and in the midst of a chaotic period when NHS wards were filling up with those sick and dying from a deadly new scourge.

It is unclear how much money was spent that might not needed to have been spent. And how far the money succeeded in protecting businesses and employment remains open to question.

Given the backdrop to all this, I think it is fair to concede that mistakes were inevitable, but we have to think about lines and where to draw them. Was the scale of those mistakes inevitable? Or could this have been handled better?

Those are questions that need answering. Perish the thought that we may find ourselves in a similar situation, but we might. This is far from being just an intellectual exercise.

To do nothing to recover the stolen money beggars belief. It creates a crook’s charter. An invitation to those who would prey on the public purse in future. Come on in, the water’s lovely and stuffed fulled of waterproofed bags of cash. Take as many as you want. Then come back for more!

The impression I’ve been getting for a while is that the machinery of government would really rather everything that went on during Covid was brushed under the carpet and forgotten about. That simply won’t do when vast amounts of public money has gone to fund the lifestyles of criminals, whether doing the right thing is incredibly hard or not.