£10.9bn Lost to Fraud and Error in Covid Support Schemes, Report Finds
Total losses from fraud and error across Covid support schemes have been estimated at £10.9bn, with a significant portion described as beyond recovery. The Covid Counter Fraud Commissioner, Tom Hayhoe, highlighted weak accountability, poor data quality, and weak contracting as key causes behind these losses.
Employment support schemes, including furlough and self-employed support, accounted for about £5bn of fraud losses. The Bounce Back Loan Scheme faced up to £2.8bn in fraud and error losses. In procurement, £13.6bn was spent on 38 billion PPE items, but 11 billion are expected to remain unused by 2024. Losses due to over-ordering were estimated at £10bn, with an additional £324m attributed to fraud.
Efforts to recover losses have resulted in £1.8bn being reclaimed. However, a substantial shortfall is deemed unrecoverable. The rapid design and implementation of schemes led to a higher risk of fraud and insufficient protections in procurement and lending processes.
A voluntary repayment scheme was launched in September allowing individuals and organizations to return pandemic funds with no questions asked until the end of December. A prior report on PPE contracts found a £1.4bn cost linked to undelivered or unusable protective gowns, masks, and gloves, of which only £400m has been recovered.
