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<p>The Government has consistently stated that fraud is totally unacceptable, and
we are taking action on multiple fronts to recover money lost to error and fraud and,
where necessary, taking legal action on those who have sought to exploit the COVID-19
support schemes. It was right to establish the schemes quickly and in a way that they
could be accessed easily by the millions who needed support.</p><p> </p><p>Given the
unprecedented efforts that the Government has made to protect jobs and livelihoods
during this pandemic, it would have been impossible to prevent all related fraud.</p><p>
</p><p>In designing the COVID-19 support schemes the Government followed the leading
practice of the International Public Sector Fraud Forum on dealing with fraud in an
emergency context. The dedicated Government Counter Fraud Function and Centre of Expertise
re-prioritised its work to focus on COVID Financial Support schemes. It provided fraud
risk assessment support, offered expert counter fraud advice, and created data driven
tools to Government departments to help prevent, detect, and recover fraud. The Fraud
Function continues to offer post event assurance support to Government departments
to find and fight fraud.</p><p> </p><p>Robust measures were put in place to control
error and fraud in the key COVID-19 support schemes from their inception. For instance,
to minimise the risk of fraud and error and unverified claims, the Coronavirus Job
Retention Scheme and Self-Employment Income Support Scheme were designed in a way
to prevent ineligible claims being made up front and made payments for employees and
businesses using existing data held on HMRC’s systems. That included cut-off dates
around scheme eligibility and the need for customers to be registered for pay-as-you-earn
online or self-assessment.</p><p> </p><p>To further bolster anti-fraud measures on
HMRC-delivered COVID-19 support schemes, the Government invested more than £100 million
in a Taxpayer Protection Taskforce of more than 1,200 HMRC staff to combat COVID-19-related
fraud, which was announced at Spring Budget 2021. This Taskforce is expected to recover
between £800 million and £1 billion from fraudulent or incorrect payments during the
years 2021-22 and 2022-23. In addition, HMRC has so far stopped or recovered £743
million of overclaimed grants in the year 2020-21.</p><p> </p><p>For local authority
administered business grants, local authorities are responsible for ensuring the safe
administration of grants and that appropriate measures are put in place to mitigate
the increased risks of fraud and payment error. Guidance for the grant schemes requires
that local authorities have assurance plans in place which set out the steps they
would take to minimise fraud. The Government has mandated pre-payment checks (company
and bank account searches) as well as post-event assurance, and a Fraud Risk Assessment,
as standard elements of this plan.</p><p> </p><p>Where grants have been paid in error,
non-compliantly or to a fraudster, local authorities must seek to recover these funds
and return them to the Department for Business, Energy and Industrial Strategy (BEIS).
If local authorities have been unable to reclaim the grant, the case may be referred
to BEIS under the Debt Recovery Policy to establish the next steps. Local Authorities
are required to demonstrate that they have taken all reasonable and practicable steps
to reclaim incorrectly paid grant funds.</p><p> </p><p>In respect of the Bounce Back
Loan Scheme, the Government continues to work closely with the British Business Bank,
lenders, and enforcement agencies to tackle fraud and to recover as many fraudulent
loans as possible. This is on top of the £2.2 billion worth of fraudulent applications
that were prevented by upfront checks.</p><p> </p><p>In addition, as part of the Spring
Budget 2021, the Government announced plans to significantly strengthen enforcement
activity against fraudulent Bounce Back Loans, including new powers for the Insolvency
Service to tackle rogue directors, and investing in the National Investigation Service
to investigate serious fraud.</p>
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