ONLY 1% of £1.1billion of taxpayers' money lost to Covid business grant fraud is recovered

The spending watchdog found that "no contingency plans exist between central and local government to support businesses during a national emergency" when the pandemic hit and it meant mistakes had been made

Over a billion pounds of taxpayers' money has been lost to fraudulent or incorrect Covid-19 business grants

Only 1% of an estimated £1.1billion of taxpayers' money lost in fraudulent or incorrect grants paid to businesses allegedly struggling during the pandemic has been recovered, tax watchdog reveals Whitehall expenses.

The 'overwhelming majority' of losses occurred early in the crisis, when the Covid-19 business subsidy program did not require prepayment checks for businesses, he notes.

Yet by mid-February 2023 the new Department for Business and Trade had only recovered £11.4m, according to a National Audit Office (NAO) report published today.< /p>

The review finds that “no contingency plan existed between central government and local government to support businesses in the event of a national emergency” when the pandemic hit.

The NAO says the Treasury has asked the Commerce Department to consider how a subsidy program might work in February 2020 – just a month before it is finally announced.

The NAO found that there were no contingency plans to help businesses in national emergencies prior to the pandemic (

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Councils were then forced to 'scrabble to understand' the scheme and answer questions from businesses, with local authorities only being told about the scheme when it was publicly announced by the Treasury, it says -he.

The NAO notes that the department “learned lessons from the initial response in 2020… which helped to significantly reduce the level of losses in later projects.”

He adds that the government must learn 'important lessons' from its experience of disbursing £22.6bn in grants to businesses during the pandemic - of which just under 5% was lost to payments fraudulent or incorrect.

Ipsos is currently carrying out a government-commissioned evaluation of the grant schemes to assess the value for money of the scheme, including the level of support provided to businesses that did not need it.

A draft final report is expected in late spring 2023.

Shadow Chancellor