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But in many instances, The Times reports, individuals took out loans before immediately transferring the funds into personal bank accounts, and spending the money on themselves.
For example, one gambler used a £50,000 loan to pay for poker games, after claiming his company turned over £200,000, even though he only had £2.72 in his account.
A sandwich shop owner received a £35,000 loan for his business, before using it to fund the refurbishment of his garden, The Times reports.
The Tory government, which prides itself on its “fiscal responsibility”, could have spent the money lost to fraud “on improving existing public services, reducing taxes or to reduce government borrowing”, the PAC said.
Chair Meg Hillier said: “With weary inevitability we see a government department using the speed and scale of its response to the pandemic as an excuse for complacent disregard for the cost to the taxpayer.
“More than two years on BEIS has no long-term plans to chase overdue debt and is not focussed on lower-level fraudsters who may well just walk away with billions of taxpayers’ money.”
She added that the government had learnt little from the 2008 banking crisis, and was “not at all confident that these hard lessons will be embedded for future emergencies”, adding that anti-fraud measures are needed at the start of any new emergency scheme, to protect the taxpayer.
It comes amidst a once-in-a-lifetime cost of living crisis, with 87 per cent of adults seeing an increase in their monthly cost of living, and a 15 per cent rise on the number of children being given food bank parcels.
The PAC says the government “cannot just accept” the level of unpaid debt it currently plans to, calling it “unacceptable” that the Department “has no long-term plans for recovering overdue debt”.
Rachel Reeves MP, Labour’s shadow chancellor, also hit out at the levels of Covid fraud, which is estimated to total £11.8bn.
She said: “These are a shocking consequence of Rishi Sunak repeatedly ignoring warnings about a lack of anti-fraud measures in his support schemes.
“It is unforgivable that £11.8bn of taxpayer money has been handed to fraudsters and criminals, and particularly painful when the government is piling new taxes on working people and businesses.
“That’s why, as part of Labour’s demand for an emergency budget from the government, we are calling on them to let the National Crime Agency investigate Covid fraud from top to bottom.
“Any embarrassment stemming from the Chancellor’s criminal incompetence must not get in the way of getting taxpayer money back.”
In January, Lord Theodore Agnew stunned peers when he quit as the minister for counter fraud over the government’s “schoolboy errors” and “desperately inadequate” response to tackling Covid fraud.
A Treasury spokesperson told The Big Issue: “Our Covid support schemes were implemented at unprecedented speed and successfully protected millions of jobs and businesses at the height of the pandemic.
“Fraud is totally unacceptable, and we’re taking action on multiple fronts to crack down on anyone who has sought to exploit our schemes and we’ll bring them to justice.
“Last year we stopped nearly £2.2 billion in potential fraud from the Bounce Back Loan Scheme, and £743 million of overclaimed furlough grants. Our new Taxpayer Protection Taskforce, made up of nearly 1,300 staff, is expected to recover an additional £1 billion of taxpayers money.”