Sunak launches £25m ‘fraud squad’ to recover lost Covid support billions

The government failed to crack down on criminals who stole billions of pounds of taxpayers' money through Covid support schemes.

The Treasury said it would double the government's counter-fraud efforts after announcing the creation of the Public Sector Fraud Authority.

The Cabinet Office will run the PSFA and give it a 25 million budget to crack down on criminal gangs who rip off the taxpayer.

The bounceback loan scheme is believed to have lost about 4.9% of its value to fraud.

The PSFA will be staffed by an elite team of data experts and economic crime investigators who will be tasked with recovering public funds.

They will be in charge of spotting suspicious companies and people trying to get access to government contracts, as well as reviewing existing programmes to try to detect any vulnerabilities to fraud.

Hours after the public accounts committee called for more resources to counter fraud efforts, the announcement came.

The MPs on the committee said the government was negligent in preventing fraud through bounceback loans, which were distributed by high street lenders but 100% guaranteed by the state.

The chancellor said on Wednesday that people are furious that fraudsters took advantage of the Covid support schemes.

The new efficiency and value for money committee, chaired by the chancellor, will meet for the first time on Wednesday afternoon.

The PSFA is part of the government's latest efforts to show it is cracking down on fraud, and comes more than a year after it committed 100 million dollars to set up the TPM.

The Cabinet Office has been given 6 million dollars to help tackle fraud and crime related to Covid support schemes. As of early March, Natis and the National Crime Agency had made 66 arrests in relation to bounceback loan scheme fraud.