Rishi Sunak forms squad to recover £5bn from COVID fraudsters

·Finance Reporter, Yahoo Finance UK
·2-min read
British Chancellor of the Exchequer Rishi Sunak leaves Downing Street on the day of the Spring Statement, in London, Britain, March 23, 2022. REUTERS/Peter Cziborra
British Chancellor of the Exchequer Rishi Sunak outside Downing Street. Photo: Peter Cziborra/Reuter

Rishi Sunak is setting up a new fraud squad as the Chancellor seeks to recover nearly £5bn taken from the coronavirus emergency bounceback loan scheme by fraudsters.

The squad will enlist data analytics experts and economic crime investigators and is expected to be operational by the summer.

The £25m taskforce recover money stolen from COVID support schemes and spot suspicious companies and people seeking government contracts. Counter fraud experts will also mount mandatory inspections on Whitehall programmes to uncover vulnerabilities.

Read more: UK economy faces £8bn hit from long-COVID and health inequalities

“We will chase down fraudsters who rip off the taxpayer. This elite fraud squad, backed by £25m, will ensure the latest counter fraud techniques are being used to track down these criminals,” Sunak said.

“People are rightly furious that fraudsters took advantage of our vital COVID support schemes, and we are acting to make sure they pay the price,” he added.

Watch: Covid loan scheme was happy days for crooks, says former minister

The announcement comes after MPs criticised the government for its “unacceptable” failure to draw up plans to recover nearly £5bn taken from the coronavirus emergency bounceback loan scheme by fraudsters.

According to a report by parliament’s influential public accounts committee, the government was “complacent in preventing fraud” in particular in bounceback loans, which were given by banks but 100% guaranteed by the state – leaving taxpayers with the bill.

As things stand, banks have little incentive to work hard to get the money back, the MPs said, as lenders can simply use the government’s 100% guarantee to claim the cash back from the taxpayer.

Dame Meg Hillier, who chairs the committee, said there is a “lack of urgency” in tackling fraud and non-repayment.

Read more: UK government borrowing almost 20% higher than forecasts

“They are going after the organised crime end of it, but at the risk of letting a lot of others go,” she said, noting that as much as 48% of the loans may not be repaid.

“They do not seem to be very interested.”

Sunak said the new Public Sector Fraud Authority, which will be up and running by July, will double the government’s central counter fraud capacity.

Watch: Spring Statement: Key takeaways from Rishi Sunak's speech

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