Buried in a lengthy new audit on public-sector fraud by the National Audit Office is a remarkable detail. It notes that at the time the Department for Business, Energy and Industry Strategy was charged with handling the Bounce Back Loan scheme, it only had two full-time staff working in its counter fraud function. That’s how unprepared government departments were to handle the risk of corruption during Covid-19.
The Public Sector Fraud Authority has estimated that between £33 and £58 billion of public money was lost to fraud and error. Dial back, and during the two-year period leading up to the pandemic fraud amounted to £5.5 billion. The Treasury has admitted it has already written off £4.3 billion stolen from its Covid Recovery schemes. Put simply, we’re accepting that criminals will be keeping vast sums of public money with no consequence.
Rewind to 2020 and naturally the BEIS took preventive measures by hiring extra fraud experts to police the bounce back loans. Last Autumn, however, the Public Accounts Committee said BEIS had not only been “complacent in preventing fraud” in the 100 per cent taxpayer-guaranteed scheme, but that the Government appeared complacent in also accepting the level of unpaid debt, with “no long-term plans for recovering overdue debt” which stood at £17 billion, with 10 per cent of that stolen. And this is before we look at PPE…
The report by the National Audit Office (NAO), published yesterday, outlines how warnings in a previous audit in 2016 had said widespread fraud was being vastly under-estimated across government departments. The NAO had noticed a suspicious disparity between the level of corruption the Government reported and the level in other countries. They also discovered there were few incentives for departments to record and report the true scale of potential fraud. Some corrective measures were taken at the time, but not enough. And boom, a pandemic pitched up and all hell broke loose.
In my opinion, the Treasury took the right decision that the higher risk for corruption in launching these schemes at speed was acceptable, given the circumstances. But the complacency in recovering taxpayer money has hugely damaged public trust. And this government still has some way to go towards restoring that trust. Because it also comes at a time when MP lobbying and extra jobs are under scrutiny; Boris Johnson has been investigated for misleading Parliament and there’s an uncontrolled rise in fraud in the private sector — many experts describe it as a fraud epidemic. Fraud now makes up 41 per cent of all recorded crime against individuals but less than one per cent of police personnel are devoted to tackling it. Shocking, isn’t it?
As one who has been a victim of fraud, I was staggered — given the banks had CCTV footage of the criminals withdrawing our money — that neither they nor the police were willing to investigate. This is just one example of everyday criminality going unpunished.
Taxpayers understandably look on with utter dismay at the waste and criminality during Covid, when our taxes are going up, public services are stretched to breaking point and borrowing is through the roof. Only after consistent and mounting public outrage did the Government establish the £100 million Public Sector Fraud Authority (PSFA) last August.
It matters because as the NAO explains there is a risk that post the pandemic, we come to perceive higher levels of fraud against taxpayers as normal and tolerated. And that alongside a rise in private-sector fraud, the UK is considered as more corrupt than it was before Covid-19.
The latest Transparency International survey of public perception of corruption shows the UK fell from eight place in 2017 to 18th in 2022. And it takes a very long time to rebuild trust.
And for governments and societies to function properly trust has to be at the heart of everything. Rishi Sunak must drill down on accountability, and not excuse what happened during Covid-19. He needs to say openly and repeatedly, we won’t let this happen ever again.
The Home Secretary must take far more action on the fraud that is rife in this country, rather than focusing solely on controlling illegal immigrants. Otherwise, the criminals keep winning. And we keep paying.
Election could be closer than you think
Last week I wrote a column arguing the reasons why I believed Rishi Sunak might win the next election. This was met with both derision and disbelief by some. Others sagely observed, however, that the election is likely to be far closer than current polls suggest.
Discussion then turned to 1974, when Labour won marginally more seats — 301 to the Tories on 297 — but with both parties falling short of the majority needed, hence a hung parliament.
Labour, not the Tories, went on to form a minority government with the Lib Dems. And they soon called another election and decisively won.
The Tories will need to win at least 310 seats in 2024, because they won’t have many to form a minority government with. Certainly not the Lib Dems, while the SNP are more likely to vote with Labour.
Sir Keir Starmer can arguably reach Number 10 if he can reach 290 seats, due to having more willing collaborators. There’s plenty of scope to still prove my prediction wrong.
A fittingly sticky situation for Trump
So Donald Trump has been voted to be indicted by a Manhattan grand jury for paying hush money to porn star Stormy Daniels during the final days of the 2016 campaign. Meaning without those payments, President Trump may never have been. Now he will become the first former president to face criminal charges — no one is above the law.
How fitting that a porn star might finally bring him down. Good on Stormy Daniels.
