Massive fraud uncovered after the UK’s rush to grant COVID loans

In figures released by the government, a total of £46 billion had been loaned while just £3.5 million had been recovered from fraudulent borrowing.

A woman walks past signage outside a pop-up vaccination centre in London on 3 December 2021. Picture: AFP

LONDON - A UK government rush to hand businesses emergency loans during COVID resulted in fraud worth an estimated £4.9 billion, the country's spending watchdog said on Friday.

The National Audit Office (NAO) said in a report that "the impact of prioritising speed is apparent in the high levels of estimated fraud".

The Conservative government of Prime Minister Boris Johnson last month had already estimated that its so-called Bounce Back Loan Scheme led to fraudulent claims totalling the equivalent of $6.5 billion.

"Counter-fraud activity was implemented too slowly to prevent fraud effectively," the NAO said on Friday.

The watchdog said "the Scheme facilitated faster lending by removing credit and affordability checks and allowing businesses to self-certify" applications.

The NAO noted that the government also ruled out additional counter-fraud measures when the Scheme was extended.

Under the Scheme, Britain offered loans of up to £50,000, or a maximum of 25% of a company's annual turnover, to help them survive the pandemic.

In figures released by the government in late November, a total of £46 billion had been loaned, while only around £3.5 million had been recovered from fraudulent borrowing.

The taxpayer could meanwhile lose out also from businesses that legitimately borrowed under the scheme failing to repay their loans.