Name: How was almost £11bn lost in fraud during the UK Covid pandemic? | BBC Newscast
Uploaded: 2025-12-10T17:00:06.000Z
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10.9 billion pounds were lost in fraud and error in the Government's programs to support businesses during the COVID pandemic.

That's the finding of the COVID Fraud Commissioner who was appointed by the Chancellor, Rachel Reeves.

What were the scams and does the government have any chance of getting that money back?

We will discuss on this latest episode of the BBC's Daily News podcast Newscast.

That is how much was lost in fraud and error as part of the COVID financial support schemes that were put in place to help businesses, employers, companies, you name it.

And this is the finding of the COVID Fraud Commissioner, Tom Hayhoe, who was appointed by Rachel Reeves making good on her pledge during the election campaign.

The number is the big thing, 10.9 billion.

The other big thing is the fact that this investigation has found that much of that is not going to be recovered.

The person who can tell us is the BBC Business editor, Simon.

Right, take us through some of the findings then of this, this big investigation.

Okay, so it found out that there was £10.9 billion of fraud or error detected in the various COVID support schemes.

Now, to put that in context, that is just a little bit less than we spend on the entire Justice Department in any given year on all our courts, all our prisons, etc, so it's a very big number of that.

10.9 billion, 1.8 billion has so far been recovered.

But one of the top lines I think from it is the bulk of the rest of it is likely beyond recovery.

So we're not going to get this money back, even though they.

The report does recommend that some departments keep going after it, which is a bit of a reality check because during the election Rachel Reeves was, was trumpeting that she was going to set up this commission and that actually then the government be able to get claw loads of money back.

But actually this is just a sort of revealing the size of the problem exercise rather than a money making scheme.

Yeah, and a lot of it I think, you know, I think it's pretty fair to say a lot of it is beyond recovery.

Now there are lots of different bits to this.

One of the things that has a very high profile are things like, you know, ppe, overspend, spending money on faulty things or that's had a very high profile.

But that's only 500 million of this total 1.7 billion on loans that were taken out by businesses of all sizes, sometimes fraudulently, maybe a business that had been dormant and wasn't really operating, so they take some money for that.

But the biggest chunk by far, 5 billion of the 10.9, is actually through the furlough, various furlough schemes, both for employees and for the self employed.

That was a very big scheme, £90 billion.

And 5 billion of that, I think is fraud or error, and that is things like employers taking the money for the furlough scheme, but then asking their employees to come to work anyway.

So getting their workers for free, basically, or, for example, inflating the number of hours they were doing to maximize their recoveries.

So this thing about dishing money out to cronies that Rachel Reeves saying.

I think the main point of this, which is that a lot of it went through the furlough scheme and it's a reminder that lots of these schemes were very, very light touch as far as spending government money normally goes.

The design and the delivery of them was in days.

Usually it would take months to do something like this.

And I remember saying at the time, I wasn't the only one saying, bosh, you know, they're going to rolling this out so quickly.

And I remember talking to the treasurer about this, you know, you know, this is going to be abused, right?

And they said, we know, but speed is of the essence.

And what we don't have in this report, really, although it doesn't acknowledge this, is what the counterfactual might have been, which is that, you know, I speak to businesses all the time that says, without my Covid loan, without the furlough scheme, I would have, I wouldn't be here today.

And that would have had a devastating impact on the economy.

So, yes, a big number, but an acknowledgement that it was rolled out at speed and that, you know, you know, we don't know what we would have lost had we not done it.

And there, I think, but there are some recommendations in there, which is that fraud prevention was not sufficiently embedded in the various civil service thinking at the time it was designed.

And there's better data need and better cooperation between departments because there's a breakdown across departments.

Also, one of the scams that it highlights is businesses applying for the loans and then winding themselves up so that they don't have to pay them back.

But it sounds like they've had some success of preventing the businesses winding themselves up.

But although it must be said that the recovery rate on the bounce back loans of various sizes is actually pretty low, of the 1.7 billion they identified in fraud, something like 70 million they've recovered to date.

So I'd say the recovery rate on that is actually not as impressive as it is elsewhere.

But you know, as I say, when, when you turn on a tap and say here's free money, there'll be some mouths around that tap which will basically see an opportunity there.

And you know, basically it's a recommendation for what can we do next time?

It worth remembering the scale of this, you know, 2 and a 200 and something billion in these various schemes, 10 billion and 10.9 billion in fraud because the total cost, and I'm using air quotes because it's really hard to work out of COVID something like 350 billion.

Yes, yeah, this is 10 billion out of 350 billion.

So I mean is that a price you're prepared to pay for an emergency response?

Clearly there are lessons to be learned or maybe at the time it is, but afterwards it isn't right at the time it's just like get the money out the door.

And I raised it with the treasury and they said, listen, we know, we know this is going to happen but speed is of the essence and like men, things, things are done in a hurry, you know, you know, things done in haste, you repent at leisure.

And also Simon, I just remember back at, back in the day the immense amount of pressure the government was under every day to oh, introduce this scheme or oh, there's this area of the economy that you've not looked after, introduce something.

Now people like people were really, really hammering and quite a lot of people angry that certain people weren't helped out at the time.

You'll remember the excluded people who are the self employed who didn't pay themselves a salary for example, but they paid themselves out of dividends.

You know I, I basically take any money that's left after paid all my bills and I take it in the form of dividends that wasn't covered and a couple of million of those people will say they didn't get any help at all.

So there's a bit of, you know, you can take from this whatever you want to be honest.

But, but As I say, 10.9 billion is a very big number.

Also what I think is so intriguing in the Treasury Press release explaining all of this.

And it's free school meals for every child for eight years.

Yeah, or every child that's eligible for free school meals.

It's a more than a penny tax if you did it any one year.

I just think it's very sort of loaded example that the Treasury.

Well, I mean, the lifting of the two child benefit cap was three and a half billion.

I have to say, though, the pressure on Rachel Reeves last week seems to have sort of dissipated this week when we talk about the budget.

Well, you'd be better placed to discuss that then than I would be.

But certainly the noises, you know, the caravan has moved on a little bit.

I think what I speak to people in the business world is saying that, you know, we just want to get on with our lives for the most part.

There was a drum beat roll up to this and it was a bit confusing and there was a bit of head fake.

And you've got Mel Stride still pressing the idea that there was a false market in government bonds.

He wants the FCA to investigate that, saying that she wasn't telling you she was dealt two cards in the pocket.

If you're a fan of Texas Holden poker, you get two.

You get two cards dealt down that no one else can see and then you share the other cards.

She was dealt one card, which was a bit of an AC saying that tax receipts were going to be much higher than expected.

And one card which was a two of diamonds or something, which was that that productivity was much lower.

She chose to play the two of diamonds and didn't tell us about the ace up her sleeve.

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How was almost £11bn lost in fraud during the UK Covid pandemic? | BBC Newscast

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