A government-commissioned investigation has found that £10.9bn in taxpayer money was lost to fraud and error during the UK’s Covid support programmes, and most of it is now unlikely ever to be recovered. Covid Counter Fraud Commissioner Tom Hayhoe said the speed and scale of the pandemic response created unprecedented risks, with public bodies unprepared to safeguard huge emergency funds. Only £1.8bn has been recovered to date, leaving a shortfall almost equivalent to the entire annual budget of the UK justice system.
The report highlights deep vulnerabilities across some of the most significant pandemic-era programmes. Employment support schemes introduced by the former Conservative government—including furlough and self-employment income support—lost around £5bn to fraud and error. The Bounce Back Loan Scheme, designed to support small businesses, is estimated to have generated up to £2.8bn in fraudulent or incorrect payments due to reliance on self-certification and minimal upfront checks. Hayhoe said weak accountability, poor-quality data and rushed contracting processes across departments created an environment where fraud could flourish, even as the schemes successfully cushioned the economic shock of lockdowns.
Massive PPE Waste and Missed Safeguards
PPE procurement accounted for some of the largest losses. The government spent £13.6bn on protective equipment, purchasing 38 billion items, but 11 billion were unused by 2024. Losses included £10bn from over-ordering and £324m from fraud. Supply chains built at speed became overwhelmed, enabling profiteering and poor-quality contracting. Hayhoe’s previous review found that PPE contracts also cost the taxpayer £1.4bn in undelivered or unusable gowns, masks and gloves, with only £400m recovered.
Political Fallout and Call for Stronger Future Safeguards
Chancellor Rachel Reeves welcomed the findings and accused the previous Conservative government of leaving “the front doors wide open to fraud”, pledging to intensify recovery efforts where possible. She said a full government response would come in the new year. In September, ministers launched a voluntary repayment scheme allowing individuals and businesses to return wrongly claimed Covid funds without investigation until the end of December. Hayhoe stressed that although the schemes were created under intense pressure, future crisis spending must embed fraud prevention far more deeply to avoid repeating the same vulnerabilities.
