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HomeUK NewsNational watchdog warns of furlough fraud and government contracts

National watchdog warns of furlough fraud and government contracts

The National Audit Office had said that it would investigate procurement amid concern over level of furlough scheme fraud

The head of Whitehall’s spending watchdog has warned cabinet ministers that there will be “no excuse” if billions of pounds worth of taxpayer fraud within government schemes continues under a second national COVID-19 lockdown.

The comptroller and auditor general at the National Audit Office, Gareth Davies, has said that there had already been “significant” amount of fraud of the furlough scheme, as well as the bounce-back loan scheme, which would take months to investigate.

This comes after the Unemployment rate in the UK rose to 4.1% in the three months to July as the total number of people out of work rose by 62,000, the Office for National Statistics said.

Davies, whose role as the chief auditor gives him a statutory responsibility to scrutinise all forms of public spending, has said that the abuse of the furlough scheme has been of deep concern to the national auditors.

“You’ve mentioned the furlough scheme as a […] source of significant fraud and error. I’d also include the bounce-back loan scheme in that list where it was clear that ministers took the decision to launch it knowing that those responsible for delivering it couldn’t guarantee the normal level of control.”

“The banks suspended their normal processes for checking out the applicants for the loan, checking out whether they have the ability to repay them and in the early stages, it wasn’t even possible to identify duplicate claims on that scheme […] it’s probably the riskiest of the set,” he said.

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Davies has said that he understood the urgency in which the schemes were introduced under, but has warned that the government must introduce new precautions if similar measures are to be extended or introduced in a potential second wave of the coronavirus.

Watchdog warns over UK furlough fraud and government contracts
The comptroller and auditor general at the National Audit Office, Gareth Davies

“While you can understand why some of this wasn’t anticipated, there’s no excuse for it to happen a second time.”

“Who knows exactly what might be needed in the future, but we must have better contingency plans so they can be rolled out quickly and the level of fraud properly controlled,” he said.

HMRC is examining 27,000 “high-risk” claims, and a number of criminal investigations into suspected fraud are now under way, Boris Johnson’s spokesman has said. Two people had been arrested in Walthamstow in north west London, last week suspected of a £70,000 fraud.

This comes after people across the UK have been unable to get tests for COVID-19 because laboratories have reached a “critical pinch-point” in processing them. The director of COVID-19 testing at NHS Test and Trace, Sarah-Jane Marsh, has apologised for the unavailability of tests.

Davies has said that civil servants are now trying to claw back money and pass on potential fraud cases to the police.

“If checks couldn’t be carried out before the money was released, they are being now. People who did commit fraud on these schemes can expect there’s a good chance that they will be detected and followed up and … the process of the law used as appropriate in those cases,” he said.

Eve Cooper
I've been writing articles and stories for as long as I can remember and in the past few years I've had the fortune of turning that love & passion for writing into my job 🙂

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