Recommendation 2

The Departments have been slow to take effective action to recover losses – three years since the Department for Business, Energy & Industrial Strategy introduced the schemes, less than 2% of the estimated £1.1 billion lost to error and fraud has been recovered. In May 2023, DBT told us it had recovered £20.9 million of the estimated £1.1 billion of losses to error or fraud. £985 million of these estimated losses are from grants in the earliest schemes, most of which had been paid out by late May 2020. BEIS started working with authorities to check payments among these schemes at the end of March 2021, finishing this work in May 2022. When we challenged officials about improving their approach to recovering losses, we were told that checking payments is very expensive, there are legal questions about the ability to recover some payments, and it will be ‘incredibly hard’ to recover much of the losses. However, DBTs Accounting Officer said he had asked a non-executive director on the Department’s Board to “to review this and to see what more we could do to recoup the money.” Officials said the Department is also looking at following up with authorities that have provided less information on fraud and error. Recommendation 2: The Department for Business and Trade and its non-executive directors should ensure that the current review of the approach to recovery is rigorous and takes a sufficiently broad view of the public interest, including in its terms of reference: • An assessment of the public value that can be achieved from pursuing these monies, including the deterrent effect of pursuing fraudsters and the impact on public confidence; • testing the Department’s previous assumptions and revisiting past conclusions; and 6 Local authority administered COVID support schemes in England • setting a figure for what it believes is recoverable and at what cost.