Fraud accounts for 40% of all crime across the UK, and the Cabinet Office estimates that fraud and error cost the public purse up to £51.8 billion every year.
Around £26.8 billion of this loss is attributable to fraud and error in the tax and benefits system, but for many areas of public spending outside the tax and benefits system there is no formal measurement, and the Cabinet Office estimates that undetected fraud and error could cost the taxpayer up to £25 billion a year – before any losses to Covid19 schemes are taken into account.
It seems that government schemes were drawn up “on the hoof”, weeks after the first case of coronavirus was detected in the UK.
This included the coronavirus business interruption loan scheme (CBILS), the coronavirus large business interruption loan scheme (CLBILS), the bounceback scheme, the business-led innovation initiative run by Innovate UK (previously investigated by The Future Shapers) and the Future Fund.
The economic strategy was of necessity rushed and reactive, initially a one-size-fits-all response that left (and continues to this day) to leave whole sectors of the economy behind. One sector that was initially not targeted was the high growth potential of start-ups and in responding to the initial gap in the schemes, the UK government designed The Future Fund. This attempted to address the immediate funding challenge that the UK’s innovative, equity-backed companies faced due to COVID-19. The scheme, alongside other Government support schemes, aimed to support companies facing financing difficulties due to the Coronavirus outbreak. The Future Fund scheme was delivered by the British Business Bank.
But, as one might expect for a programme that was designed to operate at speed, the eligibility criteria turned into a box ticking exercise on behalf of the accessors, to such an extent that the rationale for a government using public funds to take an equity stake seems decoupled from common sense and ran contrary to existing government policy in other departments.
That is, unless the prospect of the government owning a slice of an organiser of upmarket sex parties, for example, is one of the more surprising side-effects of the covid-19 pandemic.
Before publishing this piece TFS circulated it with representatives of the UK Government’s Business, Energy and Industrial Strategy Department. Up to the date of publication, no comments were yet received. Another attempt would be made to get responses from all interested parties this week, which we will publish on 19 August 2021.
Keep an eye out for this story being published tomorrow.