According to calculations used by parliament’s spending watchdog in a report into the government’s flagship jobs protection scheme, more than £3 billion might have been robbed in furlough money by criminal gangs and fraudulent employers.
The National Audit Office said there was evidence of substantial levels of furlough fraud from both organised gangs hijacking claims and employers taking money collected on behalf of the staff and NAO said that more money will be lost through staff working hours that they were claiming for.
Meg Hillier, who chairs the public accounts committee said that HMRC has paid out billions of pounds to fraudsters and that most of this has probably gone for good.
HMRC managed to stop tens of thousands of fraudulent claims against the self-employment scheme, but it doesn’t know how many managed to slip through the net.
It also missed chances to find out which companies were robbing cash meant for their staff or forcing them to work while furloughed and evidence of significant furlough fraud will add to concerns over the risks taken by the Government in its economic response to the pandemic.
The NAO said earlier this month that taxpayers face losses of up to £26 billion because of criminal activity and company defaults on its bounce back guaranteed loan scheme for small businesses.
The warning from the NAO over the cost of furlough fraud comes after the Government announced plans to expand and improve its job support scheme for businesses forced into tier 3 lockdown or struggling under tier 2 constraints.
According to data, the furlough scheme has cost the taxpayer more than £41 billion to support the wages of approximately 9.6 million people. While more than £13 billion has been spent on helping cover the earnings of self-employed workers.
NAO found the schemes have been most successful in protecting jobs up to October, but the report said the schemes missed as many as 2.9 million people given a combination of policy decisions and constraints in the tax system that meant they were ineligible.
Of this, about 1.1 million people were robbed of money because of limited data to validate claims or determine eligibility, while approximately 1.6 million were ruled out because most of their income didn’t come from being self-employed or they had trading returns above £50,000 and a further 200,000 were estimated to be ineligible because they were newly self-employed.
The NAO said there were several ways that the scheme was open to misuse. Pointing to initial HMRC calculates that between 5 and 10 per cent would have been lost in fraud and error and if accurate, this would correlate to £2 billion to £3.9 billion founded on payments made by mid-September.
However, societies problems are well summarised by this story – lie, cheat and rob whenever the Government gives out money to people, but when all said and done, we know who the actual thieves are, they’re called the Conservative Party, and criminals and politicians are the same.
Nevertheless, our Government has wasted even more money – all you have to do is look at the track and trace fiasco and this is just all smoke and mirrors to deflect from the underlying root of the problem.
And what’s £3 billion of other people’s money anyway?
If you were to lose £50,000 in a private company you’d get fired, but lose billions as a public servant and nothing happens.