THE £3.5BILLION FURLOUGH FARCE
Revealed: That’s how much of YOUR cash may have been lost in fraud and blunders
UP TO £3.5billion of furlough cash has been paid out in error or as a result of fraudulent claims, according to official estimates.
the tax office has calculated that between 5 and 10 per cent of payments have been either stolen or paid out by mistake.
the total bill for Chancellor Rishi sunak’s job retention scheme is more than £35 billion. It is being wound down and will be scrapped entirely at the end of October.
Jim Harra, the most senior civil servant at HMRC, told the public accounts select committee: ‘We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5 per cent and 10 per cent.’
If the estimate is accurate, between £1.75billion and £3.5billion has been paid out by mistake or as a result of fraud. Former Conservative leader sir Iain Duncan smith said: ‘this is a huge amount of money and demonstrates exactly why the scheme needs to be brought to a close.
‘It’s rapidly being defrauded more and more because employers are making furloughed people work and telling them they can’t say anything or they’ll lose their jobs. the scheme is open to fraud and abuse and it’s hard to check where the money is actually going.
‘the sooner we bring this scheme to an end, the sooner we can stop haemorrhaging money and get the country back to work.’
Nearly 8,000 reports of furlough fraud
were reported to HMRC last month – a marked increase from the 6,749 reported as of July 22.
Whistleblowing charity Protect has reported several instances where companies are flouting the rules.
In one instance, a company had furloughed an employee without their knowledge, and the individual only discovered the issue when they received 80 percent of their pay at the end of the month. Another report said workers had been asked to return to the company as volunteers while on furlough – something which is also against the law.
Tory MP Andrew Bridgen said: ‘This was always a clear and present danger when this generous support scheme was put in place. I would just urge HMRC to be relentless in its pursuit of fraudulent claims made by those who have perpetrated this crime against the taxpayer at a time of national emergency.’
Mr Harra told MPs: ‘We are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time.
‘We will expect employers to check their claims and repay any excess amount, but what we will be focusing on is tackling abuse and fraud.’
Mr Harra said a separate academic study had estimated the level of fraud and error might be higher than 10 per cent.
It is the first time HMRC has spoken publicly about the level of potential fraud in the job retention scheme.
The state subsidy programme covered up to 80 per cent of an employee’s salary, up to £2,500 a month, while they were on furlough. The most recent figures show that, from the beginning of March to the end of July, around 779,500 furloughed Scottish workers had their wages paid through the scheme.
By August 16, 9.6million people across the UK were on furlough, with 1.2 million employers claiming the support.
About 2.7million self-employed people have claimed £7.8 billion – with 157,000 in Scotland alone receiving £459million.
It came as MPs warned of mass redundancies in the arts and leisure sector if the scheme is not extended beyond October. In a letter to Mr Sunak, the digital, culture, media and sport select committee said 51 per cent of workers in the sectors were dependent on furlough, compared to 13 per cent across all industries.
Chairman Julian Knight said ending the scheme for all sectors ‘does not reflect the unique situation faced by the arts and leisure sector’.
He added: ‘Ministers should recognise their duty to provide ongoing support for people hard hit by this crisis and extend the help on offer to organisations facing restrictions on how they operate.
‘We should not allow the arts and leisure sectors that contribute amazing value to our economy to become “hostages to fortune” as a result of a failure to act.’
‘Crime against the taxpayer’
A MASS roll-out of airport testing is being drawn up in a bid to get Scots flying again.
Nicola Sturgeon yesterday confirmed she is considering a two-test approach that could allow travel quarantine to be cut to as little as five days.
Airport bosses made a direct plea to the Scottish Government during talks yesterday following warnings that their industry faces a jobs crisis worse than the coal industry in the 1980s. They have now been instructed to draw up proposals for how a testing scheme could work in practice.
A blueprint to be submitted to ministers in the coming days will set out plans to test passengers on their return to Scotland, and again after either five, eight or ten days.
The health risks associated with each option, as well as the economic impact, will be assessed.
It comes as UK ministers also hinted at the introduction of a two-test system, while the Department for Transport will investigate whether testing could take place abroad before people catch their flights back to the UK.
The current requirement to quarantine for 14 days on return to Scotland from a huge range of countries – including holiday hotspots such as Spain, France, Portugal and Greece – has made it impossible for most Scots to consider flying overseas and left the aviation industry facing its biggest-ever crisis.
Asked yesterday about a two-test approach to cut quarantine time, Miss Sturgeon said it was something she was looking at but added ‘it comes down to a balance of risk and a judgment about what degree of risk we want to take’.
She admitted that the current 14-day quarantine period is ‘not foolproof’ and some people already ‘slip through the net’, although she stressed it was still deemed to be the ‘most effective way of trying to avoid that importation’.
At her media briefing yesterday, Miss Sturgeon said: ‘Testing is not a perfect alternative to that [quarantine], so for example if you just tested people on day one of their arrival and they tested negative because of the incubation period, you would have no certainty that they wouldn’t go on to develop the virus and spread it and you would have then imported the virus into the country.
‘So, as many people say, you would have to do it on day one and then at a later stage. And it becomes a sliding scale of risk.
‘This is a virus that has got an incubation period of up to 14 days. The closer to 14 days that you can get with somebody, the lower the risk is.’ Miss Sturgeon added that although the 14-day quarantine rule remains firmly in place, ‘we continue to look at alternatives’.
Yesterday, representatives of Edinburgh, Glasgow and Aberdeen airports met Jason Leitch, the Scottish Government’s national clinical director, and other health officials to discuss alternatives to the current approach. They agreed to come up with options on how a two-test system could work.
An industry source said: ‘The Government’s position is saying quarantine is most effective. We are saying it’s not, as it’s having a devastating impact on our industry and we need to move to testing. There is a health conversation about how it could work and they’ve said come back with more detail.
‘We say there should be a twotest approach: test at arrival and then again after five, eight or ten days. It goes back to what level of risk they are willing to accept.’
A Scottish Government spokesman said: ‘We understand industry concerns and we do want to continue to explore whether there is a better balance around quarantine, but we are clear that the risk to public health must be minimised.
‘Airport representatives have agreed to provide further information on how testing at airports could work, which will be assessed to understand the impact on public health.’
UK ministers are exploring plans to cut quarantine time by testing passengers 48 hours before arriving here, it is claimed.
Transport Secretary Grant Shapps is said to have ‘warmly welcomed’ the proposal, which would more than halve the 14-day self-isolation period.
Under plans put forward by industry leaders, holidaymakers and business travellers would undergo a second test five days after landing. If both tests are negative, they could leave quarantine.
Comment – Page 16
‘A sliding scale of risk’