This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
This is the report summary, read the full report.
In May 2022 we reported that the Department for Business, Energy & Industrial Strategy (The Department) would not know the true extent of total fraud and error within its COVID-19 business support schemes for some time, as its assessments gradually caught up with payments made. It is now nearly one year later and despite the refining of some estimates, the situation remains the same. Of an estimated £2.2 billion lost to fraud and error, the Department report that only about £10 million has been recovered. Recovery efforts have been hindered by delays in identifying fraud and error with suspected money already spent and some trails now long gone cold.
In addition to its recovery efforts, the Department is also effectively writing off nearly £1 billion paid out erroneously by local authorities on its behalf to their local businesses during the pandemic. Although accepting that these payments were ‘not in line with how the scheme was meant to work’, the Department does not expect to recoup these funds as it considers that while individual amounts paid were too high, the funds went to businesses during a difficult time.
However, we were encouraged to hear that the Department has learnt some lessons from its COVID-19 business support schemes and applied these to its pandemic Recovery Loan Scheme and also in different contexts with its recent energy support schemes. Learning from, and avoiding, the mistakes of the past is vital to help protect taxpayers and bring more focus to value for money, particularly in crisis situations where the speed of response required can increase the risks of fraud and error. The Department must also not hide behind its own complexity when approaching its transparency reporting. With such a large budget, and extensive challenging remit, Parliamentary and public scrutiny is more important than ever to protect against risks to taxpayers and promote value for money.
In this report we also note concerns about two other specific matters included within the Department’s broad remit. First, concerning the number of errors and inaccuracies in the Companies House Register, which is damaging confidence in the Register, while false declarations seem to go unpunished. Second, concerning the Horizon Post Office scandal, where the speed of payments to compensate victims, in full, urgently needs to be improved.