British government job support schemes likely to be hit with $5 billion fraud: National Audit Office

In a significant development, Britain’s spending watchdog stated, “British companies may have fraudulently claimed up to $5.1 billion (3.9 billion pounds) in public money by accepting funds from a salary support scheme while ordering furloughed staff to still work during lockdown.”

While the National Audit Office (NAO) praised the British government for rolling out support schemes for employees and the self-employed ahead of schedule at a time when the coronavirus-induced COVID-19 pandemic which emerged from Wuhan, China forced much of the country’s economy in lockdowns, it said, given the tremendous pressure of the pandemic it did not have sufficient time to test the schemes and as a result the it is likely that the total scale of frauds and errors are likely to be considerable.

It will know the number towards the end of 2021, at the earliest.

In September it had said, according to its estimates, frauds and errors on the furlough scheme could have ranged between 5% to 10% on claims amounting to 39.3 billion pounds. Fraud on the first round of the self-employed scheme could have ranged from 1-2%.

It suspects that companies may have bent the rules by getting staff to work under lockdowns or claim payments and not pass them onto employees in full.

A fraud hotline had received 10,000 reports. According to a NAO survey, 9% of respondents admitted working at the request of their employer.

For a future Job Support Scheme, the government will publish the names of those employers making claims and notify employees through their tax accounts.

“It appears that the scale of fraud and error could be considerable, particularly for the furlough scheme,” said Gareth Davies, the head of the NAO while adding, “HMRC could have done more to make clear to employees whether their employer was part of the furlough scheme.” 2.9 million people are not eligible for the schemes.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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