Government has lost ‘unacceptable’ billions of taxpayers’ money

The Public Accounts Committee says the total cost of government losses in the response to the pandemic has exposed the taxpayer to long-term financial risks and ‘large amounts’ being lost to fraud and error.

The Coronavirus Job Retention Scheme, otherwise known as furlough, is estimated to lose £5.3 billion alone to fraud and error - nearly nine per cent of the funding distributed through the scheme. The estimated loss to fraud and error across all Covid 19 response measures is not known but is expected to be at least £15 billion across the schemes and loans.

The Public Accounts Committee is concerned that HM Treasury does not currently plan to distinguish the cost of Covid-19 from departments’ business-as-usual spending in future, saying that ‘as the UK recovers from the pandemic it is more vital than ever that government maintains accountability for public money and transparency over what is being spent’.

The committee has said this will be crucial to ensure lessons are properly learned and embedded so the same mistakes that led to these ‘unacceptably high’ losses and risk, already to be borne by generations of taxpayers, are not repeated in any future crisis.

Dame Meg Hillier, chair of the committee, said: “As the PAC has made clear across a series of reports on the costs of Covid, lack of preparedness and planning, combined with weaknesses in existing systems across government, have led to an unacceptable level of mistakes, waste, loss and openings for fraudsters which will all end up robbing current and future taxpayers of billions of pounds.

It is essential that for as long as we will be paying the costs of Covid19, which is at least the next 20 years just in some of the loan repayment terms, the Treasury and all of government continue to account specifically for what it has spent in response to the pandemic. Government must be held accountable in this way to all the future taxpayers who will be paying for this response. Crucially this must ensure lessons are learned for when the next big crisis hits - be it climate, health or financial.”