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The UK has recovered an estimated £1.1bn of the £22.6bn of taxpayer funding it provided to businesses during the Covid-19 pandemic due to fraud and errors, according to an influential cross-party group. Less than 2%. MPs.
The House of Commons Public Accounts Committee said on Tuesday that ministers had so far recovered only lost grants issued by local authorities under eight schemes set out by the Commerce Department, compared with £11m in February.
The schemes are designed to support businesses as they weather the coronavirus crisis and include the Small Business Grant Fund, the Retail, Hospitality and Leisure Grant Fund and the Local Authority Discretionary Grant Fund.
“The government has been slow to recover losses from errors and fraud in more than £1bn of Covid funding schemes,” the committee said, adding that it urged “the government to develop concrete steps to tackle this fraud” and errors in order to recover funds and restore public trust”.
When the PAC asked about the government’s slow progress, Commerce Department officials said checking payments was expensive and there were legal problems with the ability to recover some of them. It would be “extremely difficult” to recover most of the losses, they added.
The committee also said in the report that it was “unclear” what the impact of the £22.6bn provided to businesses would be and how much of it would be necessary.
The report found some councils had made it more difficult to implement their COVID-19 business plans due to financial pressure from underinvestment by central government. The “central government’s distance from reality” has in some cases led to “confusion (and) delays,” the report added.
The vast majority of losses across these eight schemes (around £985m) came from the first wave of grants, most of which were paid out by May 2020.
Dame Meg Hillier, chair of the committee, said the government should not wait for the conclusion of the official Covid-19 inquiry to learn the lessons of the pandemic.
“We must no longer develop policy in a national emergency without strong planning and good local data, and without the proper funding of local authorities to collaborate to provide the support needed,” she said.
The grants from parliament are just part of a total of £154bn the government has spent to support businesses during the pandemic, including a £70bn furlough scheme aimed at safeguarding jobs and £26bn coronavirus business interruption loans for big firms plan.
Ministers have also provided more than £47bn in “bounce back” loans to more than 1.5m small businesses through state-backed bank the British Bank of Commerce.Coincidentally, it is estimated that Fraud and Mistakes in These Backlashes Officials put the loan at around £1.1bn.
British Chancellor of the Exchequer Jeremy Hunt told MPs on Tuesday that the government was “resolute” in recovering funds obtained through fraud.
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