Fraud and mistakes in Covid support programs cost taxpayers more than £ 30bn, MPs warn – .

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Fraud and mistakes in Covid support programs cost taxpayers more than £ 30bn, MPs warn – .


Fraud and mistakes in coronavirus support programs have already cost taxpayers more than £ 30 billion – with many more billion in expected losses, MEPs warn today.

Up to £ 27bn in ‘rebound loans’ may never be repaid because companies have gone bankrupt or been cheated in their demands, according to a new report.

Blunders and excessive demands for universal credit payments reached an all-time high of £ 5.5bn in the year through March.

The House of Commons public accounts committee is concerned that other significant sums may have also disappeared over the past year thanks to funds designed to protect businesses and individuals affected by the pandemic.

The councils are tasked with providing several support programs for Covid, but the committee said there was “worrying evidence” of their inability to investigate possible misuse of the money.

The mind-boggling deficit comes on top of the £ 51.8 billion in public money which the government says is lost every year due to fraud and error before the coronavirus even strikes.

Fraud and mistakes in coronavirus support programs have already cost taxpayers more than £ 30 billion – with many more billion in losses expected, MEPs warn today

Up to £ 26.8bn is wasted each year in the tax and benefit system, and a further £ 25bn is wasted in other areas of public spending where exact numbers are not being measured.

Committee chairman Dame Meg Hillier said last night: ‘The government knows it is losing more than £ 26 billion a year to fraud and errors in the tax and benefit systems, but admits he can’t even detect an additional £ 25bn.

‘That’s over £ 50bn in utilities a year given to fraudsters and through payment errors – before frightening losses pile up in our Covid spending so far and against the backdrop of ‘a massive increase in needs.

“Fraud is never acceptable and with so many people suffering from Covid, the government needs to take a firm stand on fraudsters.

“The committee has long been concerned about the impact of departments’ own mistakes – including overpayments that need to be recovered – causing further hardship for those already vulnerable. “

It comes after The Mail revealed how crooks were helping people fraudulently obtain bounce loans worth up to £ 50,000 by providing false tax returns to deceptive officials and setting up fake bank accounts for non-existent companies.

In one incident, a scammer took out one of the loans on behalf of a luxury car dealership in an attempt to buy a £ 41,000 Porsche from the same company.

Critics say one of the main shortcomings of rebound lending is that the government has promised to guarantee loans from banks – encouraging lenders to carry out minimal checks because they would not lose if business fails and are unable to repay the loan. ‘silver.

The couple offered to organize bogus loans worth several tens of thousands of pounds at a time - almost no questions asked

It comes after The Mail revealed how crooks were helping people fraudulently obtain bounce loans worth up to £ 50,000 by providing false tax returns to deceptive officials and setting up fake bank accounts for non-existent companies.

Scammers who charged £ 6,000 to take care of the paperwork

Illustrating how easy it is to defraud Covid’s financing plans, the Mail exposed two scammers who offered to organize bogus loans worth tens of thousands of pounds at a time – almost without asking any questions. Questions.

Journalists posing as businessmen facing financial difficulties have been offered false tax returns so that they can show they have a turnover of £ 200,000 – meaning that they could apply for the government backed up to £ 50,000 bounce loan.

Working in an office building in south London, ‘consultants’ Zohaib Butt and Imran Khan demanded £ 6,000 in cash to submit these fake accounts to HM Revenue and Customs for the loan to be processed.

The crooks have promised to ‘remove’ the paperwork as soon as the £ 50,000 loan is handed over to prevent the customer from being liable for tax on the figures of the false declaration.

Khan assured the undercover journalist that he had already done so and that there would be “no problem.”

The government has also made it clear that it wants the money to flow quickly to prevent companies from going bankrupt.

Now MPs are calling for the names of companies that have secured Covid loans and grants to be released, demanding that the Treasury set new transparency guidelines for government support over the next six months.

The committee said it would provide “an opportunity for whistleblowers and others to report suspicious allegations.”

In a report, he asked how the Treasury would ensure Whitehall takes a “zero tolerance” approach to fraud and error after the pandemic.

He said all departments should report on estimated levels of fraud and error in their Covid programs, how they are being handled and what they plan to do to recover lost taxpayer money.

The committee said it was “unacceptable” that it took 12 months for the Treasury to approve funding for HM Revenue and Customs’ Taxpayer Protection Task Force to investigate the misuse of assistance programs. of Covid, even though he knew there was an increased risk of fraud.

The Department for Business did not consult with Cabinet Office fraud experts when designing the bounce loan program, and HMRC does not intend to measure fraud in the support program. Self-Employed Income Fund and Eat Out to Help Out – both set up to mitigate the effects of the pandemic.

The committee said: “HM Treasury and Cabinet Office should, within six months, introduce mandatory fraud impact assessments that require formal approval … for all government ‘major project portfolio’ programs and for all other programs that departments identify as having a moderate to high risk of fraud or error. ‘

About 16,000 civil servants work for the “anti-fraud function” in the public sector to detect and combat fraud – mainly at the Ministry of Work and Pensions and at HMRC.

But the Cabinet Office admitted it was “not in a position to give an opinion” on whether they were working in the right areas.

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