Audit finds over £33billion wasted or lost to fraudsters during Covid pandemic
More than £33billion of taxpayers’ money has been wasted or lost to fraudsters during the pandemic, a Daily Mail audit reveals today.
The astonishing tally – based on government data – includes £17billion written off in unpaid bounce-back loans, with £5billion in losses stolen by fraudsters.
It comes after the Department of Health admitted this week that it had wasted nearly £9billion on personal protective equipment, on top of the £4billion lost to HMRC schemes.
But the mammoth number takes into account neither the £28billion Test and Trace scheme nor two government loan schemes which lent out £32billion, as waste figures have yet to be produced for those -this.
This means that our £33 billion figure will certainly increase by several billion more.
A Daily Mail audit found £32.9bn of taxpayers’ money was wasted or lost to fraudsters during the pandemic – with big stories including £17bn of cancellations on the scheme rebound loan and £8.7bn of PPE waste
The losses dwarf the £12billion that is set to be boosted each year by National Insurance’s planned rise in April.
Tory MP Christopher Chope has accused Boris Johnson of raising taxes to pay for ‘inexcusable waste’.
MP Steve Baker, Tory vice-chairman of the Covid Recovery Group, said: ‘As the state rushed headlong to deal with the pandemic, the waste was bound to happen, but it’s breathtaking.
“This cannot happen again.”
The revelations also led to calls for a full audit and investigation by the National Crime Agency into “astronomical levels of fraud”.
Pressure was already mounting on the government after anti-fraud minister Lord Agnew resigned last month, blaming the “dismal” record of loan fraud.
Families are also facing a cost of living crisis which is set to see bills rise by an average of £2,000 a year from April.
The Covid-19 pandemic has already cost the government between £315 billion and £410 billion, or between £4,700 and £6,100 per person in the UK.
Almost a tenth of this amount was lost through fraud, waste or loss.
This included loans worth £17billion made under the Bounce Back Loan Scheme which will never be repaid.
More than half a billion pounds have been spent on abortive Nightingale hospitals
In December, it emerged that two international money launderers had defrauded the taxpayer out of £10million in loans from the scheme while he was out on bail. Police have only recovered £180,000 so far.
A further £4billion is expected to be lost to fraudsters in the furlough scheme, the self-employed income support scheme and the Eat Out To Help Out restaurant subsidy.
HMRC boss Jim Harra was summoned to MPs yesterday to give an explanation.
Chairman Mel Stride, MP for the Commons Treasury Committee, said: ‘It must come to mind now that there are a small number of things you could have done differently?’
Another £1billion was lost under the business grant scheme, more than half a billion pounds was spent on aborted Nightingale hospitals and £143million on ventilators were written off.
The government recently admitted it overpaid £227million in Universal Credit in 2020/21.
It has been criticized for handing out £7billion in contracts to £1,100-a-day consultants and using just 11% of call center capacity.
A 6p increase in the basic income tax rate would be needed to make up for the £33billion loss in a single year.
The National Insurance increase, a 1.5% hike for businesses and employees, comes into effect in April, just as the household energy cap rises to almost £2,000 a year.
Craig Mackinlay, a Tory member of the MPs’ Public Accounts Committee, said: ‘The ‘somebody else’s money’ attitude just won’t be washable anymore.
A government spokesperson said: ‘These figures are inaccurate and the claims are categorically false.
“We have always been committed to using taxpayers’ money responsibly and ensuring that every pound is well spent.”