Significant Covid scheme fraud risk 'justified'

Significant Covid scheme fraud risk 'justified'
 Credit: Dominic Lipinski/PA Wire

Coronavirus support schemes introduced by the government carry a “significant risk” of fraud and error, according to the Treasury’s permanent secretary.

In a Treasury Committee meeting yesterday (November 11) Tom Scholar, permanent secretary at HM Treasury, said the risk had been “very clear” from the beginning but was deemed justified under the circumstances.

Sir Tom said: “When all of these schemes were introduced, and when we were preparing the policy advice on them, going right back to March, it was very clear from the beginning that there was a risk, a significant risk, of fraud and error.

“And that’s something we went through, and went through with ministers. The policy decision was that that was just an inevitable risk given the nature of the scheme, and a risk that was justified, given the need for very urgent action to support the economy.”

Alison Thewliss, MP for Glasgow Central, had described some of the figures given for fraud and error as “quite eye-watering”.

Sir Tom added there was a focus to try to “crack down” and minimise the risks and referred to enforcement action.

Last month HMRC confirmed that it was writing to around 24,000 people who may have falsely claimed on the Self-Employment Income Support Scheme.

Arrests were made in September as part of an investigation into a suspected £70,000 abuse of the Coronavirus Job Retention Scheme.

The government extended the furlough scheme last week and increased support for the self-employed after the announcement of a second lockdown in England.

But Ms Thewliss said the support package announced on November 5 “still did nothing” for some, such as limited company directors who had been “excluded” since the start of the crisis.

She said there was frustration among those who had received “absolutely no support from March” yet seen a “huge level of fraud” in the existing scheme.

Sir Tom said there were groups of people where there was the same difficulty in March with a lack of real-time data, and “serious operational difficulties” for HMRC in introducing a system that was robust to the risk of attempted fraud by, for example, organised crime.

He added: “I totally understand, and all of the Treasury ministers have said this repeatedly, we understand that that’s very frustrating for people that don’t qualify.

“But in the end, ministers have to make a balanced judgement about the level of support as against the risk to the taxpayer, and in those cases that’s where the line was drawn.”

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