Fraudsters ‘swindle £5billion from Covid loan scheme and £17billion may never be repaid’

FRAUDSTERS have swindled £5billion from the Covid loan scheme and £17billion might never be paid back, a report says.

Ministers are accused of overseeing “colossal fraud and error” and turning a blind eye to smaller criminals in the hope of recovering more from organised crime gangs.

The National Audit Office said £28billlion had been dished out before anti-fraud checks made sure firms weren’t applying for more than one loan.

Measures were later introduced, but came too late to prevent fraud and focused instead on detection.

One in four of all UK firms applied to the scheme and 1.5million loans worth £47billion were eventually dished out.

But around £17billion of the cash won’t be repaid, the Department for Business reckons — and up to £5billion of applications were fraudulent.

Chair of Public Accounts, Meg Hillier MP, said the counter-fraud measures were “too little, too late”.

She added: Government is focussing on recovering money from organised crime, yet many of the smaller scale fraudsters will have slipped through its fingers.”

NAO boss Gareth Davies said: “Government needs to improve on its identification, quantification and recovery of fraudulent loans.”