Home secretaries back report warning billions at risk from virus fraud
The taxpayer could nearly £8 billion from fraudsters exploiting government coronavirus support schemes, according to a report backed by two former home secretaries.
The Policy Exchange think tank said the measures rushed through to save people and businesses from economic ruin are particularly vulnerable to scams because of the size of the packages and the speed with which they were introduced.
A paper published today titled Daylight Robbery estimates fraud and error could cost the government between £1.3bn and £7.9bn.
The calculation is based on expected fraud rates for governmentexpenditurefromthe Cabinet Office and the Department for Work and Pensions.
In a foreward to the report, the former Labour home secretary David Blunkett said criminals have used the Covid-19 crisis to “dip below the radar” and take advantage of unusual circumstances.
His Conservative counterpart Sajid Javid also backed the report, saying it highlighted “the challenge faced by government in preventing fraudsters from taking advantage of the unprecedented package of measures to support individuals and businesses during this crisis. Sadly, a number of individuals have sought to exploit the Treasury’s interventions, and sums involved are likely to be significant,” Mr Javid said.
“The government has been alive to this issue, however, and now is a good time to join up counter fraud measures to keep it to an absolute minimum.”
The report warns that the true cost of coronavirus fraud “may be closer to the upper bound, due to the higher than usual levels of fraud that accompany disaster management”.
Lead author Richard Walton, former head of counterterrorism at the Metropolitan Police, said: “The government’s economic response has been entirely justified but it has had the unintended consequence of opening up opportunities for fraud on a significant scale.”
Policy Exchange calls for a new minister for fraud and a forum to oversee the prevention, detection, investigation and prosecution of coronavirus-related scams.
It comes after a 57-year-old man from the West Midlands became the first person to be arrested in connection with an alleged £495,000 fraud of the UK Government furlough scheme. The Metropolitan Police also arrested two men on Wednesday over an alleged scam to claim “bounce back loans” from the Government’s scheme to help small businesses.