Slow fraud recovery risks taxpayer money, MPs urge government action

MPs have criticised the government for its sluggish efforts in recovering taxpayer money lost to fraud and error during the pandemic. The Public Accounts Committee (PAC), a cross-party group, has called for a “step change” in Whitehall’s approach to risk in order to avoid similar “panic responses” in the future. The committee’s report revealed numerous “repeated problems,” including an estimated £4.5bn in total fraud and error across COVID employment schemes managed by HMRC. The department is expected to recover only £1.1bn of this amount, according to the PAC.

“Some increase in fraud and error was an inevitable short-term consequence of providing support quickly, but government is being too slow to recover taxpayer pounds lost,” the report said.

The PAC also discovered that the Department of Health and Social Care had squandered an “extraordinary” £14.9bn on PPE and related COVID expenditure over the past two years.

“No-one could predict the COVID-19 pandemic, but we could have been better prepared,” the report added. “The scale of the losses incurred in a panic response on issues such as PPE procurement are documented in this report. We need to learn the lesson that there is always unpredictability.”

In response, a government spokesperson stated, “In the last two years, we have recovered more than £3.1bn of fraud losses, including within COVID-19 schemes, and as the report acknowledges, we have already made significant progress by establishing the Public Sector Fraud Authority.”

The spokesperson also emphasised the government’s ongoing efforts to expand its Counter-Fraud Profession, develop new technologies, and enhance skills and training to further protect public funds.

Angela Rayner, Labour’s deputy leader, commented on the situation, stating, “This is a damning indictment of eye-watering Tory waste, with Rishi Sunak writing off billions in taxpayers’ money lost to COVID fraud after ignoring basic checks and warnings.”