Sunak launches £25m ‘fraud squad’ to recover lost Covid support billions

theguardian.com:

A £25m “fraud squad” is to be launched after MPs criticised the government’s failure to crack down on criminals who stole billions of pounds of taxpayers’ cash through Covid support schemes.

Announcing the creation of the Public Sector Fraud Authority (PFSA) on Wednesday, the Treasury said it would double the government’s counter-fraud efforts, adding to work of the £100m taxpayer protection taskforce (TPT) launched more than a year ago.

The PSFA, which is to start operating by July, will be run through the Cabinet Office and given the £25m budget to “crack down on criminal gangs who rip off the taxpayer”.

It is believed that about £4.9bn was lost to fraud through the bounceback loan scheme, while another £5.7bn is estimated to have been lost from fraud and error within the furlough and self-employment programmes.

The Treasury could not immediately confirm how many people would be recruited to the PSFA but said it would be staffed by an “elite team” of data experts and economic crime investigators tasked with recovering public funds.

They will also be in charge of spotting “suspicious companies and people” trying to gain access to government contracts, and review existing Whitehall programmes to try to detect any vulnerabilities to fraud.

The announcement came hours after parliament’s influential public accounts committeecalled for more resources to counter fraud efforts, after criticising the government for its “unacceptable” failure to recover taxpayer cash.

MPs on the committee said the government was “complacent in preventing fraud”, in particular through bounceback loans, which were distributed by high street lenders but 100% guaranteed by the state – leaving taxpayers to foot the bill.

The chancellor, Rishi Sunak, said on