- The UK has lost billions to Covid loan fraud
Just 1% of the £1.1 billion lost in fraud to the UK’s Covid Business Scheme has been recovered, the country’s public spending watchdog, the National Audit Office, revealed recently.
It’s a scandal which we’ve previously warned about and which led to the resignation of the UK government’s anti-fraud minister.
After the Covid pandemic hit and the Covid business scheme was announced, we predicted that the UK’s Covid loan schemes scheme would be open to abuse, and the debts incurred would be a ticking time bomb for the public purse in years to come. I am certain we were not alone in anticipating this developing scenario.
Of course, without the scheme many businesses would have gone to the wall. Unfortunately this need for haste also left it open to abuse by the unscrupulous who saw an opportunity to exploit it.
When you consider the negative financial impact upon those who were battling to save the lives of those vulnerable to the disease, the damage cannot be underestimated.
When you consider the negative financial impact upon those who were battling to save the lives of those vulnerable to the disease, the damage cannot be underestimated. But the money lost comes from the national purse – from tax payers – and could have perhaps been spent equipping the emergency services for the frontline struggles against the pandemic.
Instead, substantial amounts of public money have gone to line the pockets of fraudsters.
The police have a saying that “cuts have consequences”. Sustained cuts inflicted on the number of rank and file officers in the UK mean that there are few with the skills and experience to investigate what can be complex fraud investigations linked to this type of wrongdoing.
In an ideal world, the police would join forces with His Majesty’s Revenue and Customs (HMRC), the Department for Work and Pensions (DWP) and other government agencies with the knowledge to bring the perpetrators of such huge fraud to justice. Instead, a specialist squad of this nature is unlikely to see the light of day.
Losses as significant as those revealed by the National Audit Office call for a meaningful response
Yet losses as significant as those revealed by the National Audit Office call for a meaningful response: I wait with baited breath to see what the UK government will announce in its anticipated National Fraud Strategy, apparently scheduled to be announced last month alongside the nation’s new Economic Crime Plan (but which for some reason was delayed).
Fraud is already running rampant in the UK and hits such as these to the public purse, in tough economic times, need to be addressed. A 1% recovery rate is pitiful and means that the fraudsters are laughing all the way to the bank. That can’t be right.
Tony McClements is Head of Investigations at Martin Kenney & Co (MKS), and a guest lecturer in Fraud and Financial Investigation at the University of Central Lancashire. He is a 33-year veteran police detective investigating serious & organised crime, specialising in the investigation of fraud since 1998.