Covid aid worth £5billion handed out in error

Lost for ever: Up to £5BILLION in Covid pay-outs handed out in error through furlough scheme and self-employed grants may never be recovered, watchdog warns

• The National Audit Office said £96.9billion was given to firms through furlough
• A report estimates that £1.5billion of furlough money went to hard hit companies
• £3.5billion of self-employed grants went to traders who saw turnover increase

As much as £5billion wrongly dished out in Covid job support may never be recovered, the public spending watchdog has warned.

The National Audit Office said that, overall, £96.9billion was given to firms through furlough and grants to the self-employed to save them from going bust when the pandemic struck and Britain went into lockdown.

But the generous nature of the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme meant that many firms who received taxpayers’ cash did not need it.

Today’s report estimates that £1.5billion of furlough payments went to companies who said they would not have made redundancies without the support, and whose turnovers rose or stayed the same. Similarly, £3.5billion of self-employed grants went to traders who saw their turnover increase, while one in five said their profits increased.

The National Audit Office said that, overall, £96.9billion was given to firms through furlough and grants to the self-employed to save them from going bust when the pandemic struck and Britain went into lockdown (file image)

HMRC estimates that error and fraud in the two schemes could range from £3.2billion to £6.3billion. Of this, about £100million might have been ‘extracted’ by organised crime gangs, mainly through hacking, while the majority was scammed by people who kept working when they were meant to be on furlough.

The taxman hopes to claw back £1.1billion of the lost cash by 2024 but has found the work ‘challenging’ and ‘deployed fewer staff than expected’, the NAO said.

‘Between £2billion and £5.1billion of overpayments will remain unrecovered, according to HMRC estimates,’ the report stated.

HMRC estimates that error and fraud in the two schemes could range from £3.2billion to £6.3billion (file image)

HMRC has 24 criminal investigations under way and 23 people have been arrested but ‘no cases have yet gone to court’.

The NAO said ‘financial impact tests’ should have been used early on to ensure Covid support money went only to those who needed it. ‘It is likely that several billion pounds have been paid to claimants who saw their incomes increase during the period. While the figures are highly uncertain, large amounts of error and fraud are unlikely ever to be recovered.’

n Millions can book their autumn Covid booster and flu vaccines from tomorrow. Phone and online bookings for the latest Covid jab will open to those aged between 50 and 64. Those eligible for a flu jab can book online for the first time.

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