Asked by: Matthew Offord (Conservative - Hendon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate his Department has made of the amount of covid-19 loans that were claimed fraudulently but cannot be retrieved.
Answered by Paul Scully
We continue to work with lenders and enforcement agencies to recover fraudulently obtained loans.
The Department’s 2020-2021 Annual Report & Accounts has a central estimate for fraud and error loss of relating to the Bounce Back Loan Scheme specifically. We do not hold a central estimate for fraud and error loss for the Coronavirus Business Interruption Loan Scheme or the Coronavirus Large Business Interruption Loan Scheme.
The final level of loss will not be known for some time, as not all suspected fraud will necessarily translate into a fraud occurrence, and because some fraudulently obtained funds will be recovered or repaid.
Asked by: Justin Madders (Labour - Ellesmere Port and Neston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many prosecutions there have been for fraudulent covid-19 business support claims in the last two years.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
At the Spring Budget 2021 the Government announced a £100m investment into a Taxpayer Protection Taskforce to significantly extend Her Majesty’s Revenue and Customs (HMRC) work to tackle fraud and error in the COVID-19 support schemes that HMRC administered (Self Employment Income Support Scheme, Coronavirus Job Retention Scheme and Eat Out to Help Out).HMRC designed these schemes to prevent fraud, both in the eligibility criteria and the claim process itself. HMRC also put in place a series of checks on claims before they were paid, so they blocked those that were highly indicative of criminal activity.
The Government and HMRC always knew they could be attractive to fraudsters and are taking tough action to tackle fraudulent behaviour. Anyone who keeps grant money despite knowing they were not entitled to it, faces having to repay up to double the amount they received, plus interest and potentially criminal prosecution.
To date there have been no prosecutions on the HMRC administered COVID-19 support schemes. However, HMRC has 21 active criminal investigations and the final decision on whether to prosecute in these cases will be made by independent prosecution partners.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to help ensure that gambling companies pay back any money incorrectly allocated by his covid-19 furlough policies.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Coronavirus Job Retention Scheme was available to any employer providing they met the eligibility criteria.
HMRC designed the schemes to prevent fraud, both in the eligibility criteria and the claim process itself. HMRC also put in place a series of checks on claims before they were paid, so they blocked those that were highly indicative of criminal activity.
However, the Government and HMRC always knew they could be attractive to fraudulent behaviour and are taking tough action to tackle this. Anyone who keeps grant money, despite knowing they were not entitled to it, faces having to repay up to double the amount they received, plus interest and potential criminal prosecution.
Where claimants have made a genuine error, HMRC are supportive and reasonable in their approach to recovering overclaimed grants. Claimants are afforded the opportunity to put things right, without fear of sanctions.
All compliance activity is risk based and HMRC do not focus on particular sectors.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many claims were excluded or rejected from the Government covid-19 furlough scheme; and if he will summarise the reasons for exclusion.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has been clear throughout the pandemic that HMRC should prioritise getting vital support to businesses and their employees.
HMRC designed the Coronavirus Job Retention Scheme (CJRS) to prevent fraud before any payments were made, in both how they set the eligibility criteria and the claim process itself.
To qualify for CJRS, employers needed a Pay As You Earn scheme and to submit a Real Time Information (RTI) return. Additionally, for claims with 100 employees or more, employers were required to provide details of the individual employees’ wages.
HMRC also put in place a series of checks on claims before they were paid, so they blocked those that were highly indicative of criminal activity.
As a result, an estimated 21,500 ineligible claims for CJRS were automatically blocked from entering the claims process.
In addition to those that were blocked, a further 3,500 claims for CJRS were rejected in 2020-21 as they showed indications of being linked to criminal activity.
Further checks also included checking claim amounts against employment information already returned to HMRC and capping any excessive CJRS claims to the correct entitlement amount.
Details of HMRC’s prepayment compliance activity for 2021-22 will be released in HMRC’s Annual Report and Accounts later this year. This will provide the information on blocked and rejected claims for 2021-22.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the Answer of 10 March 2022 to Question 135713 on Business: Coronavirus, how much of the amount lost from the public purse to fraud in the Bounce Back Loan Scheme has been recovered to date.
Answered by Paul Scully
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 reported by lenders as having been prevented by upfront checks.
Lenders are responsible for undertaking recovery action in the first instance, whether in cases of suspected fraud or otherwise. Given the stage of the scheme it is not currently possible to identify the level of recoveries which apply directly to fraudulent loans.
Asked by: Matthew Offord (Conservative - Hendon)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how much expenditure by her Department that was identified as fraudulent was repaid to her Department in each of the last three years.
Answered by David Rutley - Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)
The Department publishes Fraud and Error estimates, as shown in the link, which include data on how much money was potentially lost to Fraud in each of the last 3 years. Fraud and Error in the benefit system is rare, but we know that organised criminals and opportunists sought to exploit the extraordinary circumstances of a global pandemic for gain. We took steps to stop this and estimate that we prevented nearly £3bn of additional fraud and error in 2020/21.
fraud-and-error-stats-release-2020-2021-estimates-tables-xls.xlsx (live.com)
These same statistics also indicate how much money was repaid by way of benefit debt. The totals include debts incurred through Fraud, Claimant Error, and where appropriate, Official Error.
The repayment figures are:
20/21: £0.8bn (£0.5bn Housing Benefit and £0.3bn other DWP benefits)
19/20: £1.0bn (£0.6bn Housing Benefit and £0.4bn other DWP benefits)
18/19: £1.1bn (£0.7bn Housing Benefit and £0.4bn other DWP benefits)
The slight fall in 20/21 was due in part to debt recovery being paused for three months from April 2020, so that Debt Management staff could support processing of the substantial rise in new Universal Credit claims, following the outbreak of coronavirus.
Note that other benefits recovered by DWP, including Tax Credits and Advances, are not included in these totals.
Asked by: Matthew Offord (Conservative - Hendon)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how much expenditure by her Department was identified as fraudulent in the last three years.
Answered by David Rutley - Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)
The Department publishes Fraud and Error estimates, as shown in the link, which include data on how much money was potentially lost to Fraud in each of the last 3 years. Fraud and Error in the benefit system is rare, but we know that organised criminals and opportunists sought to exploit the extraordinary circumstances of a global pandemic for gain. We took steps to stop this and estimate that we prevented nearly £3bn of additional fraud and error in 2020/21.
fraud-and-error-stats-release-2020-2021-estimates-tables-xls.xlsx (live.com)
These same statistics also indicate how much money was repaid by way of benefit debt. The totals include debts incurred through Fraud, Claimant Error, and where appropriate, Official Error.
The repayment figures are:
20/21: £0.8bn (£0.5bn Housing Benefit and £0.3bn other DWP benefits)
19/20: £1.0bn (£0.6bn Housing Benefit and £0.4bn other DWP benefits)
18/19: £1.1bn (£0.7bn Housing Benefit and £0.4bn other DWP benefits)
The slight fall in 20/21 was due in part to debt recovery being paused for three months from April 2020, so that Debt Management staff could support processing of the substantial rise in new Universal Credit claims, following the outbreak of coronavirus.
Note that other benefits recovered by DWP, including Tax Credits and Advances, are not included in these totals.
Asked by: Feryal Clark (Labour - Enfield North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of trends of the level of former employees being denied furlough payments for which they are eligible by employers.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
Information is not available on the trends of former employees who did not receive furlough payments. HMRC publishes statistics on the Coronavirus Job Retention Scheme (CJRS); the latest release was published on 16 December 2021: https://www.gov.uk/government/statistics/coronavirus-job-retention-scheme-statistics-16-december-2021.
CJRS was available to all employers with a Pay As You Earn (PAYE) system and to all employees on PAYE, regardless of their employment contract. The key eligibility criteria was that employees had to be on payroll the day before the scheme was announced, so 19 March 2020 for the first and second iterations of CJRS, 30 October 2020 for the third iteration of CJRS, and 2 March 2021 for the fourth iteration of CJRS. Employers also had to have previously notified HMRC, via a PAYE Real Time Information (RTI) submission, about a payment of earnings for that employee.
CJRS grants covered any type of employment contract and employers could claim the grant for the hours their employees and workers on payroll were not working, calculated by reference to their usual hours worked in a claim period. Flexible furlough meant employers could work for any amount of time and any work pattern, while still being able to claim CJRS grant for the hours not worked with reference to hours the employee would usually have worked in that period.
However, employers could not claim for any days from 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer. This included people serving notice of retirement or resignation. Normal redundancy rules and protections would have applied in these circumstances.
Ultimately, it was for the employer to decide whether to offer furlough to their employees, and claim the CJRS grant, according to the needs of their business. The employer was under no obligation to access the scheme.
If an employee believes that the employer did make a claim on their behalf, but did not pass this on to the employee, they should tell HMRC.
Reports of COVID-19 scheme abuse can be made to HMRC via their online fraud reporting tool here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/report-fraud-to-hmrc.
Calls can also be made anonymously and free of charge to report suspected fraudulent activity to the COVID Fraud Hotline on 0800 587 5030.
Asked by: Virginia Crosbie (Conservative - Ynys Môn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to recover funds that have been lost to fraud related to covid-19 support schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
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, take 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. 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.
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.
Robust measures were put in place to control error and fraud in 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 around existing data held on HMRC’s systems.
To further bolster anti-fraud measures on HMRC-delivered COVID-19 support schemes, at the Spring Budget last year, 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. This Taskforce is expected to recover between £800 million and £1 billion from fraudulent or incorrect payments during 2021-22 and 2022-23. In addition, HMRC has so far stopped or recovered £743 million of overclaimed grants in 2020/21.
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.
As part of the Spring Budget last year, we 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.
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 against the increased risks of both 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. Government has mandated pre-payment checks (company and bank account searches) as well as post-event assurance, and a Fraud Risk Assessment.
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 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.
Asked by: Philip Davies (Conservative - Shipley)
Question to the Attorney General:
To ask the Attorney General, if she will take steps to ensure that her Department and its agencies remove all internal covid-19 related policies, restrictions and mask mandates.
Answered by Alex Chalk - Lord Chancellor and Secretary of State for Justice
Throughout the pandemic, all Civil Service employers including the Attorney General’s Office (AGO), Crown Prosecution Service (CPS) Serious Fraud Office (SFO), Government Legal Department (GLD) and Her Majesties Crown Prosecution Service Inspectorate (HMCPSI) have followed government guidance in setting out their internal COVID-19 related policies. This includes complying with the Working Safely during Coronavirus (COVID-19): Guidance which sets out the key actions organisations should take to protect employees and customers in order to reduce the risk of COVID-19 spreading in workplaces, along with carrying out health and safety risk assessments that include the ongoing risk from COVID-19.
The Government’s recent Living with COVID-19 document, sets out how and when the remaining restrictions will be lifted in England. Government guidance was subsequently amended, including the Working Safely guidance. Which alongside risk assessments, sets out further actions organisations can take to protect employees and customers in the workplace, such as ensuring adequate ventilation, frequent cleaning and asking people with COVID-19 to stay home. The guidance advises that people continue to wear face coverings in crowded and enclosed settings where they come into contact with people they do not normally meet, when rates of transmission are high. Employers will continue to align their policies accordingly. Should individuals wish to wear masks as a matter of personal choice this should be respected.
In respect to the SFO estate, The Canadian High Commission (CHC), in their capacity as landlord, have requested SFO employees, contractors and visitors continue to wear face coverings in the common areas of 2 – 4 Cockspur Street. This includes the lobby, lifts, stairs, toilets, and reception.