Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps the Government is taking to recoup monies lost to fraud in the coronavirus grant schemes.

The Government has consistently stated that fraud is totally unacceptable. We are taking action on multiple fronts to recover money lost to error and fraud and, where necessary, taking legal action against those who have sought to exploit our schemes.

The Government takes the issue of potential fraud relating to covid support schemes extremely seriously. Robust measures were put in place to control error and fraud in the key covid support schemes from their inception. For instance, to minimise the risk of fraud and error and unverified claims, the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) were designed in a way to prevent ineligible claims being made up front, and made payments for employees and businesses using existing data held on HMRC’s systems. That included cut-off dates around scheme eligibility and the need for customers to be registered for pay-as-you-earn online or self-assessment.

To further bolster anti-fraud measures, at the Spring Budget last year, the Government invested more than £100 million in a Taxpayer Protection Taskforce of more than 1,200 HMRC staff to combat Covid-related fraud. This Taskforce is expected to recover between £800 million and £1 billion from fraudulent or incorrect payments during 2021-22 and 2022-23. In addition, HMRC has so far stopped or recovered £743 million of overclaimed grants in 2020/21.

Local authorities are responsible for ensuring the safe administration of Covid support grants to businesses and that appropriate measures are put in place to mitigate against the increased risks of both fraud and payment error. Guidance for the grant schemes requires that local authorities have assurance plans in place which set out the steps they would take to minimise fraud. Government has mandated pre-payment checks (company and bank account searches) as well as post-event assurance, and a Fraud Risk Assessment, as standard elements of this plan.

Where grants have been paid in error, non-compliantly or to a fraudster, local authorities must seek to recover these funds and return them to BEIS. If local authorities have been unable to reclaim the grant, the case may be referred to BEIS under the Debt Recovery Policy to establish the next steps. Local Authorities are required to demonstrate that they have taken all reasonable and practicable steps to reclaim incorrectly paid grant funds. 93 cases are currently being triaged and debts assigned to BEIS for referral to Indesser, a Cabinet Office procured debt recovery service, to action.