Committees

Government lacks proof of impact of £97 billion of taxpayers’ money spent on furlough and self employed job support

8 March 2023

  • Still  minimal understanding or action on missing workforce since pandemic
  • £4.5 billion lost to fraud and error in job support schemes
  • At least £5 billion paid to self-employed and employers whose incomes did not drop
  • Monies paid to those who saw no loss of income when several million who needed it received no support

In a report today the Public Accounts Committee says HM Treasury and HM Revenue & Customs quickly put employment schemes like furlough and the SEISS for self-employed in place. But HMRC was too slow to manage problems in the support design that meant some in genuine need missed out, and to tackle fraud and error where support was given that was not actually needed.

Levels of unrecovered error and fraud are far too high: HMRC has had little success recouping the £2.3 billion incorrectly paid to employers who claimed taxpayers’ money for furlough payments for employees who continued to work. The Taxpayer Protection Taskforce is being wound up without recovering the money expected.

Gaps and lags in HMRC’s data continued to drive the problems with HMRC providing excessive support to some while others who did need it were ineligible under tax rules. HMRC must now send a clear message on recovering fraud through its tax compliance activities and must urgently increase the rate of repayments from those who overclaimed. It must quickly address known gaps in its data without imposing excessive bureaucracy on taxpayers, so that large-scale financial interventions ensure all those in need and only those in need get assistance.

Chair's comments

Dame Meg Hillier MP, Chair of the Committee, said

“Bad actors in British business are running rings around the Revenue. Perhaps some of the same companies that were complaining about even the minimal levels of transparency over billions and billions that were paid out in order to save jobs in this country but are now just lost to the public purse, likely forever.

While money that genuinely saved jobs and households was got out admirably quickly, the weak recovery effort will fail to deter potential future criminals. Too many companies claimed that shouldn’t have and now won’t give it back.”

Further information

Image: CCO