The government has lost billions of pounds of taxpayer money to fraud since the start of the pandemic, according to a National Spending Watch report.
The National Audit Office (NAO) said around £21bn, including £7.3bn in Covid relief, was stolen with no chance of recovery.
She warned that it is “highly unlikely” that most of the missing money will be returned, noting that most government agencies have no idea what kind of fraud they are suffering from and cannot prove they know about it, have the proper level of resources to prevent fraud. . .
Fraud on government accounts controlled by the NAO skyrocketed from £5.5bn in the two years before the pandemic (2018-19 and 2019-20) to £21bn in the two years after. Estimates go on top of the estimated £10 billion in tax revenue lost each year to tax evasion and crime.
The report warns that there is a risk that “people will consider higher levels of taxpayer fraud to be normal and tolerable. There is also a risk that the UK will be seen as more corrupt than before the pandemic. Such perceptions can undermine public confidence in the integrity of public services.”
Estimates by the Public Sector Fraud Administration (PSFA) last year amid growing concerns about Covid support funds show the losses from fraud are even higher.
The PSFA estimate, which includes both fraud and incorrect payments, is between £33.2bn and £58.8bn out of HM’s total tax revenue of £1,106.1bn and £608.8bn sterling.
Despite the losses, the NAO found that “most agencies have limited ability to fight fraud and corruption and cannot demonstrate that this is commensurate with their risk” and urged agencies and government agencies to work together to combat fraud to operate “as one government “. “.
HMRC reimbursed £762m in fraud and errors estimated at £4.5bn in their Covid-19 support schemes last March and expects to recover just £1.1bn by the time their target the taxpayer protection group will be completed and set up a special law enforcement unit. for Covid scam.
The Department of Work and Pensions (DWP) found £500m saved through fraud and error in a retrospective review of Universal Credit claims filed during the peak of the pandemic, but the NAO found at least £1.5bn in 2021– 2022 is still paid. It says the DWP is now scheduling targeted case reviews to “identify and recover as many of the rest as possible.”
She warns that the government lacks “a good understanding of the extent of corruption.” According to the NAO, there is no separate assessment of the extent of government corruption.
Efforts by ministers to better understand fraud attacks and raise standards among anti-fraud officers have made some progress, the report notes, but adds that “apart from taxes and benefits, reliable estimates of where and what the risks of fraud are, and most government agencies cannot demonstrate that they have fraud prevention tools commensurate with the risk.”
Gareth Davis, head of the NAO, said: “The level of fraud reported in the annual reports and accounts we review has increased significantly. In addition to losing taxpayer money, there is a risk that fraud and corruption will be accepted as normal and tolerated by the government. Left unaddressed, it can undermine public confidence in the integrity of public services.
“The government needs to do more to understand the scope of the problem and cannot yet demonstrate that it is effective in combating fraud. The creation of the Public Sector Fraud Office provides a real opportunity to address this problem.”
Meg Hillier, Chair of the Public Accounts Committee, said: “At least £21bn of taxpayer money has been lost to fraud since the start of the pandemic – four times more than in the previous two years.
“But most governments still don’t understand how much fraud and corruption they are dealing with and can’t show that they are dealing with it effectively.
“While the government has set up the Public Sector Fraud Office to give much needed attention to this issue, it needs to make sure it learns from the pandemic and tackles corruption and taxpayer fraud.”
Source: I News
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