Up to £3.5bn furlough scheme cash may have been wrongly paid out | UK news
The government believes it may have paid out up to £3.5bn in wrong or fraudulent claims for the furlough scheme.
Jim Harra, the top civil servant at HM Revenue & Customs, said that his staff had calculated for the possibility that as much as 10% of the money might have gone to the wrong places.
“We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%,” the permanent secretary said.
He was speaking in front of MPs on the public accounts committee.
The government has so far made £35.4bn in furlough payments, according to the latest figures. It means that somewhere between £1.75bn and £3.5bn could have been paid out wrongly.
“That will range from deliberate fraud through to error,” Harra added.
“What we have said in our risk assessment is we are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time.
“Although we will expect employers to check their claims and repay any excess amount … what we will be focusing on is tackling abuse and fraud.”
It is the first time HMRC has spoken publicly about the level of potential fraud that could have been committed as part of the job retention scheme, which covered up to 80% of an employee’s salary while they were on furlough.
The government rapidly rolled out the huge scheme, causing many experts to say that a certain amount of fraud was inevitable.
Furlough is now winding down and is expected to end for good next month. However, businesses that bring staff back from furlough will receive another £1,000 if the employee is still in work by the end of January.
By 16 August, 9.6 million people had been put on government-supported furlough, with 1.2 million employers claiming the support.
Meanwhile, roughy 2.7 million self-employed people have claimed about £7.8bn in support from the government.
Harra said that an academic study had estimated the level of fraud and error might be even higher than 10%.