The Department of Commerce has left an “open target” for fraud and embezzlement operators, which has added “billions upon billions of taxpayers’ misery”, Parliamentary Expenditure Monitoring Agency has found.
In its review of the annual report of the Department for Business, Energy and Industrial Strategy (BEIS), the Public Accounts Committee (PAC) said it recognized that the government had provided significant assistance to businesses in the height of the epidemic.
However, it said the efforts to identify fraud and errors came too late, due to the fact that money would be spent while they were confirmed and “the road would cool down much earlier”.
“The BEIS says it has seen this risk coming, but it is not really clear where the government was looking at it when it set its initial cowardly response,” said Dame Meg Hillier, chair of the PC and Labor MP.
“It offers an open target for fraudsters and embezzlers and they get cash, adding billions to the taxpayers’ misery. These lessons should have been learned from the banking crisis a decade ago and prepared for the government’s epidemic practice.
The comments come amid frustration over the amount of coveted fraud that has put billions of pounds worth of government cash at risk.
Of the £ 79.3bn government-guaranteed loans for business support in the first year of the epidemic, it is estimated that taxpayers will lose about £ 4.9bn for fraud and error. This is in addition to the 5. 5.7 billion that is estimated to be lost between Farlow and the self-employment program.
The report accuses BEIS of failing to adequately identify or reflect on the potential risks of organized economic crime.
“Some of these tearful losses represent only the department’s best estimates, so the actual amount of taxpayer money that will be lost could be even greater,” PAC said, adding that there was also limited information about the actual level of fraud related to the িড 21.8bn Covid grant, which Was distributed by local authorities.
BEIS only estimated the level of fraud and error related to the £ 11.5bn grant, about bn 1bn, the PAC said.
An official spokesman said: “We are continuing to crack down on Kovid support project fraud and will not tolerate those who want to deceive consumers and taxpayers.
“These schemes have been implemented at an unprecedented pace to protect millions of jobs and businesses. If the government did not act quickly, more businesses would fail and many more jobs would be lost.