Recommendation 13

DBT told us that it is considering contacting the 40% of authorities that did not respond to its fraud and error survey, to understand what was happening locally.20 However, when we questioned witnesses on what more could be done to increase the level of losses recovered, they cited a number of challenges. DBT and HM Treasury emphasised that establishing whether payments were irregular is both “hard and expensive” due to limited data on the early payments, ambiguities in scheme design, ministerial promises to overlook some borderline local authority decisions taken at speed and the sheer number of payments involved.21 DBT pointed out there can be “legal questions about the ability to recoup money.” DBT gave us figures of £450 million to £500 million to carry out checks on every one of the 4.5 million payments. In relation to recovery once irregular payments have been identified, DBT said recovery as a percentage of identified fraud has been much lower than recovery as a percentage of identified error. Fraudulently-obtained payments were sometimes very quickly split into small amounts and moved to multiple other accounts. DBT observed that recovery of error would involve putting pressure on small businesses that might still be struggling.22