A £ 25m fraud squad will be set up after lawmakers criticized the government’s failure to deal with criminals who stole billions of pounds of taxpayers’ money through Covid support schemes.
Announcing the creation of the Public Sector Fraud Office (PSFA) on Wednesday, the Treasury Department said it would redouble the government’s anti-fraud efforts by adding £ 100m to the Taxpayer Protection Task Force (TPT). , launched more than a year ago.
The PSFA, which is due to become operational by July, will be run by the cabinet and given a £ 25m budget to “deal with criminal gangs that rob taxpayers”.
It is estimated that around £ 4.9 billion has been lost through fraud through the repayment scheme, while another £ 5.7 billion is thought to have been lost through fraud and errors under holiday and self-employment programs.
The finance ministry could not immediately confirm how many people would be recruited to the PSFA, but said it would be staffed by an “elite team” of experts on data and economic crime investigators tasked with recovering public funds.
They will also be responsible for detecting “suspicious companies and people” trying to gain access to government contracts, and will review Whitehall’s existing programs to try to detect any vulnerabilities to fraud.
The announcement came hours after Parliament’s Public Accounts Committee called for more resources to counter fraud efforts after criticizing the government for its “unacceptable” failure to recover taxpayers’ money.
The committee’s deputies said the government was “complacent in preventing fraud”, in particular through repaid loans, which are distributed by major creditors but are 100% guaranteed by the state, leaving taxpayers to take over.
Chancellor Rishi Sunak said on Wednesday: “People are right to be outraged that fraudsters have taken advantage of our vital Covid support schemes and we are working to make sure they pay the price.
The finance ministry said further details on the PSFA would be released after the new commission on efficiency and value for money, chaired by the chancellor, met for the first time on Wednesday afternoon.
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The PSFA is part of the government’s latest effort to show it fights fraud, and comes more than a year after committing £ 100 million to set up a TPT run by 1,200 HMRC staff to recover up to £ 1.5 billion by the end of this financial year.
The government says it has also used the anti-fraud office to support fraud and provided another £ 6m to the National Investigation Service (Natis) to deal with fraud and crime related to Covid’s support schemes. As of early March, Natis and the National Crime Agency had made about 66 arrests in connection with a loan repayment fraud.
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