PAC finds staggering fraud levels in COVID-19 business loans schemes

By Vinisha Joshi  | Date: 2022-05-19

PAC finds staggering fraud levels in COVID-19 business loans schemes

The Public Accounts Committee of the British House of Commons has reportedly revealed that taxpayers will lose at least $6.07 billion (£4.9 billion) to fraud and errors in the government’s COVID-19 business support schemes.

For the unversed, the UK government gave out loans worth $98.2 billion (£79.3 billion) in total between 2020 and 2021 to help companies stay afloat amid the COVID-19 disruptions. During the same timeframe, the Department of BEIS (Business, Energy and Industrial Strategy) also provided over $27 billion (£21.8 billion) to the local authorities to dish out as grants for businesses.

At the start of the first nationwide lockdown in March 2020, above 170,000 new companies were registered to gain access to the COVID-19 loans. The number of newly registered companies further rose by above 20% between 2020 and 2021 as compared to the previous five years, indicating a warning sign and the need for closer scrutiny, the UK watchdog said.

The parliamentary budget oversight group has warned that this ‘eye-watering’ amount lost over the past two years could further increase.

The PAC held the UK government responsible for failing to recognize the warning signs and put basic safeguards in place while offering financial assistance.

According to the head of the committee, Dame Meg Hillier, BEIS was aware of the risks but was not clear where the government was looking when it launched its initial COVID-19 response program. This lack of scrutiny has consequently provided an open door to embezzlers and fraudsters, adding billions to taxpayer woes.

While officials from the Department of BEIS had attempted to underline some of the fraud risks, they had not sufficiently worked to reflect the potential risk factors from organized economic crime.

PAC recommended that the UK government rapidly assess the true extent of the financial losses to fraud and explain its measures to recover the same.

Source credit: https://news.sky.com/story/covid-19-eye-watering-fraud-levels-in-loans-missed-by-government-says-watchdog-12615484

About Author

Vinisha Joshi     thisisourtownrichmond.co.uk

Vinisha Joshi

As a qualified Engineering graduate, Vinisha Joshi takes pride in playing with words. Presently, she pens down insightful articles on business, core industry, technology, and the like for Thisisourtownrichmond in addition to other platforms. Creativity comes naturally...

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