UK Government ‘Too Slow’ to Recover Fraud Losses Following COVID-19 Pandemic: Report

Soldiers wearing full PPE in the form of face shields, gloves, face masks and bibs wait to assist CCP virus testing at a rapid testing centre in the Liverpool exhibition centre in Liverpool, England, on November 11, 2020 Paul ELLIS / AFP via Getty Images

MPs have said the government needs to learn how to better manage crises like the COVID-19 pandemic in order to tackle fraud and error, which cost taxpayers billions of pounds.

The Committee of Public Accounts (CPA) has issued a report looking into the challenges and opportunities across Whitehall during the period that Britain opened up after two years of lockdowns.

The report, published on Tuesday, said that the government has been “too slow” to recover taxpayer funds lost owing to wasted expenditure on personal protective equipment (PPE) and related COVID-19 expenditure, which comes to £14.9 billion across the last two years.

The CPA looked into 22 contracts awarded by the government to Randox for testing services, worth a maximum total value of £776.9 million. In the first contract the committee recorded failures in basic record-keeping and gaps in conflict-of-interest declarations. The Department for Health and Social Care (DHSC) also marked supplier offers as “VIP” if they had been referred from ministers, MPs, or Number 10, the inquiry said.

The CPA is also looking into government contracts for the supply of PPE by PPE Medpro. The deal, worth over £200 million, is now the subject of an investigation by the National Crime Agency into potential fraud.

“No-one could predict the COVID-19 pandemic, but we could have been better prepared. The scale of the losses incurred in a panic response on issues such as PPE procurement are documented in this report. We need to learn the lesson that there is always unpredictability,” the committee said.

Fast movement of staff and an unprecedented turnover of ministers led those commissioning project failing to see them through to delivery, said CPA.

The committee Chair Dame Meg Hillier said that Whitehall too often clings to projects that have failed.

“I still see too much optimism bias in operation and the movement of staff means that this optimism is sometimes inherited by later programme leads who don’t have a project overview,” she said.

“I cannot believe that I am dealing with a string of gentleman amateurs on such important and complex programmes,” Hillier said, quoting “one frustrated minister.”

Checks and Warnings

HM Revenue and Customs (HMRC), responsible for delivering employment support schemes to businesses and individuals during the pandemic, estimated that total fraud and error was £4.5 billion. Only £1.1 billion of the losses will be recovered, HMRC said.

A Whitehall spokesperson said that in the last two years the government has recovered more than £3.1 billion of fraud losses, including within COVID-19 schemes.

“However, we are not complacent, which is why we are expanding the government’s Counter-Fraud Profession, developing new technologies and boosting skills and training to further protect the public purse,” the spokesperson added.

Labour Party deputy leader Angela Rayner said that British people “just can’t trust the Tories with their money.”

“This is a damning indictment of eye-watering Tory waste, with Rishi Sunak writing off billions in taxpayers’ money lost to COVID fraud after ignoring basic checks and warnings,” Rayner said.

In response to the rising level of taxpayers’ funds lost to fraud in the aftermath of the pandemic, the government launched the Public Sector Fraud Authority (PSFA) in 2022. Part of the Cabinet Office and HM Treasury, the PSFA is meant to tackle the effects of fraud on the taxpayer and establish an enforcement unit to deal with unresolved instances of potential fraud against the public.

On Tuesday, Hillier is set to discuss the government’s crisis management capabilities with the permanent secretary for the Cabinet Office, Alex Chisholm.

PA Media contributed to this report.