NAO launches probe into coronavirus employment schemes

17 Jul 20

The National Audit Office is to investigate the government’s implementation of Covid-19-related employment initiatives, including how it is mitigating the risk of fraud.

An announcement from the watchdog said it would study the Coronavirus Job Retention Scheme and the Self Employment Income Scheme, with a view to reporting in the autumn.

The combined value of the schemes, aimed at keeping employees in work during the crisis, is currently estimated to be around £75bn.

The NAO said: “Our study considers HM Revenue & Customs’ and HM Treasury’s implementation of the schemes so far, including how they have been set-up and whether they have reached the groups intended.

“The study will also consider how they are mitigating the risk of fraud in the schemes.”

At the end of May, the government introduced a draft clause to the 2020 Finance Bill, currently proceeding through Parliament, to allow HMRC to impose a 100% tax charge on fraudulent claims.

In a fiscal sustainability report published earlier this week, the Office for Budget Responsibility said that additional sources of pressure on public spending could come from fraudulent claims through measures brought in to support individuals and businesses through the crisis.

Earlier this month, HMRC announced it had arrested a West Midlands man as part of an investigation into a suspected £495,000 CJRS fraud.

It said the 57-year-old was arrested on suspicion of cheating the public revenue, fraud by false representation, VAT evasion and money laundering.

The NAO has already launched a number of investigations into aspects of the government’s response to the Covid-19 crisis, including separate studies on government procurement and the supply of personal protective equipment to the NHS and adult social care sector.

It is also looking at the free school meals voucher scheme, the Bounce Back Loan Scheme and the drive to increase the number of ventilators available to the NHS during the crisis.

At the start of the pandemic, NAO auditor general Gareth Davies told PF he was gearing his organisation up for a “substantial programme” of Covid-19 work.

He said: “We aren’t clinicians, but we do have experts in procurement, in project management and in emergency planning. Clearly, all of that is going to be reviewed in a huge amount of detail for the future.

“What we’re seeing for real is the cost of a risk we haven’t been able to manage and head off, and there’s bound to be a significant role for the NAO in learning those lessons.”

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