There was a significant rise in fraud cases when Sunak was Chancellor
The Tories seek to portray themselves as the party of sound finances, Prime Minister Rishi Sunak harps on about fiscal prudence and yet, under his watch, government fraud has quadrupled.
Billions have been lost to fraud. Indeed, a new report from the Commons’ Public Accounts Committee which compared the two years before the 2020 pandemic under Theresa May’s Government with the two years that followed when Rishi Sunak was Chancellor under Boris Johnson, has found that Government fraud has almost quadrupled under Sunak from £5.5 billion to £21 billion.
There was a significant rise in fraud cases when Sunak was Chancellor after he approved £97 billion to be spent on the pandemic furlough scheme, the bounce back loan scheme, and his ‘Eat Out to Help Out’ scheme.
The report from the Public Accounts Committee states that while HMRC implemented its Covid-19 employment support schemes quickly to businesses and individuals, the tax body nonetheless had to reduce ‘its compliance staffing to support Covid schemes and the level of fraud and error is high’.
HMRC estimates that total fraud and error across the lifetime of these schemes was £4.5 billion, although its estimate is highly uncertain. HMRC is forecasting that it will recover only a quarter (£1.1 billion) of the losses.
Another area hit by fraud was the government’s bounce back loan scheme, where loans were provided to businesses to keep them going during the pandemic. The scheme lost an estimated £2.2 billion to fraud and error, and at the end of last year the department had only recovered £10 million.
The report also goes on to highlight that the government does not expect to recoup nearly £1 billion, mostly lost to error in local authority administered grant payments.
The committee’s chair, Labour’s Dame Meg Hillier, said: “HMRC made the list last year because of growing tax debt and the levels of fraud and error that it is managing. I continue to be concerned about these two areas of risk. I am not convinced that HMRC is prioritising this work.
“HMRC has a clear case for focusing on recouping money that is owed. But prevention is better than corrective action and it must plan and implement better fraud and error safeguards in the future.”
Basit Mahmood is editor of Left Foot Forward
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