Taxpayers lost £10.9 billion to fraud and error, an independent report has found.
The Covid Counter Fraud Commissioner, Tom Hayhoe’s, final report to Parliament finds many schemes – including Bounce Back Loans and Eat Out to Help Out – were rolled out with huge fraud risks and no early safeguards, costing the taxpayer millions.
Weak accountability, bad quality data and poor contracting were identified as the primary causes of the £10.9 billion pound losses, which were enough to fund daily free school meals for the UK’s 2.7 eligible million children for eight years.
Chancellor Rachel Reeves appointed Tom Hayhoe in December 2024 to ensure mistakes of the past are never repeated, the UK Government said.
Chancellor, Rachel Reeves said:
“Leaving the front door wide open to fraud has cost the British taxpayer £10.9 billion — money that should have been funding our public services, supporting families, and strengthening our economy.
“We have started returning this money to the British people and we will leave no stone unturned in rooting out the fraudsters who profited from pandemic negligence.”
The UK Government said it had already actioned many of the Commissioner's early proposals. These include:
- A voluntary repayment scheme, launched in September, giving claimants until 31 December to pay up.
- Tougher sanctions powers through the Public Authorities (Fraud, Error and Recovery) Bill, which became law on 2 December.
- Specialist fraud recovery teams to track down suspected fraudsters and recover taxpayer cash, from 2026.
Josh Simons, Cabinet Office Minister, said:
“We're taking more action to bring fraudsters to justice and make the state the hardest possible target: giving investigators new powers to take on cases, using artificial intelligence to speed-up counter-fraud work, and setting up a repayment scheme to claw back money into the public purse.”
The report highlights that counter fraud controls were ‘inadequate’ and only improved later in the pandemic. Hayhoe makes further recommendations to ensure the country is prepared for further crises that need an economic response from government, emphasising that future preparation and robust controls will provide the best value for money for taxpayers.
The UK Government will consider the report in full and respond early in the new year.
