Covid fraud ‘three times bigger’ than estimate, leading scientists claim

Investigators later uncovered money being spent on luxury cars, gambling, home improvements, cryptocurrency and other personal purchases

Investigators later uncovered money being spent on luxury cars, gambling, home improvements, cryptocurrency and other personal purchases

The Government is underestimating Britain's Covid fraud bill by more than £26billion, Oxford scientists claimed today as MPs grilled officials over the billions still missing from pandemic support schemes.

The Public Accounts Committee today questioned ministers and the Covid Counter Fraud Commissioner over whether more than £9 billion lost to fraud and error can ever be recovered. Officials put total losses at £10.9billion.

But researchers behind a four-year Oxford investigation concluded the true losses could have been closer to £37billion after bringing together evidence from the National Audit Office, HM Treasury, HMRC, Companies House, Action Fraud, Public Accounts Committee hearings, Freedom of Information requests and dozens of official reports.

Rather than simply totalling known fraud, the investigation examined what happened when ministers rushed out £370 billion of emergency support while stripping away many of the normal safeguards designed to protect taxpayers' money.

The Oxford University researchers, Professor Carl Heneghan, director of Oxford University’s Centre of Evidence Based Medicine and Dr Tom Jefferson concluded the result was a "greenhouse effect for criminals to fleece the public purse".

They stated: "We estimated that losses could plausibly approach 10 per cent of the £370 billion pandemic expenditure - around £37 billion."

Their investigation, to be published on their substack, Trust the Evidence, found fraudsters exploited self-certification, weak identity checks and taxpayer-backed loan schemes by creating bogus companies, submitting multiple applications, using stolen identities and dissolving businesses after pocketing the cash. Some Bounce Back Loan applications were completed in minutes.

Fraudsters also exploited the schemes to fund cars, duplicate loans and sham businesses. They argue many companies disappeared, evidence was destroyed and assets moved overseas long before investigators arrived.

The report argues that once ministers relaxed anti-fraud checks, organised criminals already operating against the tax and benefits system were presented with unprecedented opportunities.

Dr Jefferson said: "It was all too easy; all you needed was a tenner, an email account and an address, and in an afternoon, you could have a new company and start your application to one of the schemes."

The researchers say the Government's estimate is lower because it focuses on losses identified within individual Covid schemes, whereas their investigation assessed the wider losses that flowed from emergency policies themselves.Among the examples highlighted were:

£18.4 billion of expected losses on the £47 billion Bounce Back Loan Scheme.

An estimated £71 million lost through the Eat Out to Help Out scheme - equivalent to roughly one in every twelve meals claimed never having existed.

The researchers say those figures illustrate why examining schemes individually fails to capture the overall scale of what happened.

They also point to evidence from former anti-fraud minister Lord Agnew, who resigned in frustration after describing the Treasury's response as a "Dad's Army" operation.

Giving evidence to MPs, Lord Agnew previously said "only a couple of extra days were needed for proper checks to be carried out" and warned money was being lent to companies "that did not even exist before Covid."

The Oxford pair, who carried out their original analysis in 2022, say they treated his evidence as an insider's account of systemic failures.

"We treated it as a warning from someone who had seen the machinery from inside government."

Four years later, they argue, ministers have effectively accepted many of the same failings.

The Government's response to the Covid Counter Fraud Commissioner's report acknowledges fraud controls were not embedded in emergency planning, accepts departments failed to share information effectively and promises stronger powers for Companies House, specialist fraud investigators and new Treasury rules requiring fraud prevention to be built into future emergency spending.