Labour: Thousands of Covid fraud tip-offs have not been pursued, with 98% of calls not being investigated, admits Tory Minister

Ninety eight per cent of calls referred from the government's Covid Fraud Hotline are not being pursued as active investigations, ministers have revealed.

Almost two years on from the scheme’s inception, only 103 investigations are still ongoing from the 5,124 actionable calls made to the hotline, just two percent of the total tip-offs the government received.

Established in 2022, the scheme was described by then Chancellor Rishi Sunak as: "Clearly criminals have sought to exploit our support schemes. We’re going to do everything we can to get that money back and go after those who took advantage of the pandemic.”

The newly revealed total of just 103 ongoing investigations represents just 1 in 50 of the referrals arising from calls to the Covid Fraud Hotline by concerned members of the public. This tiny proportion of cases sits within the backdrop of an estimated £7.2 billion of public money estimated to have been lost to Covid-related fraud according to House of Commons Library analysis of government reports.

The Hotline was established in October 2020 as a joint initiative between the Cabinet Office and the independent charity Crimestoppers, with members of the public invited to call anonymously and free of charge to report suspected fraudulent activity.

At the time, Minister Julia Lopez said: "We cannot let criminals profit from the COVID crisis, as every pound stolen by fraudsters could be invested in our vital public services."

Now the Cabinet Office has been forced to disclose that only twenty operations arising from referrals are still being pursued by the National Investigation Service, while a further 83 reports are being investigated by the Insolvency Service.

Rishi Sunak has faced heavy criticism when he ignored warnings in March 2020 from Keith Morgan CBE, Chief Executive of the British Business Bank who warned that the ‘scheme is vulnerable to abuse by individuals and by participants in organized crime.’

The former Counter-Fraud Minister, Lord Agnew, resigned his position in January 2022 in protest at the writing-off of those losses from fraud and waste, criticising the Treasury under Rishi Sunak's leadership as appearing “to have no knowledge of, or little interest in, the consequences of fraud to our economy or society”.

Labour’s Shadow Chancellor, Rachel Reeves, vowed at this year’s Labour Party Conference to "go after those who profited from the carnival of waste during the pandemic", and announced plans to appoint a Covid Corruption Commissioner.

Designed to bring money back to other public services such as schools and hospitals, the Commissioner will be given powers to bring together agencies and direct efforts to recover fraudulently lost public funds and examine pandemic-related contracts line by line to ensure justice for taxpayers. 

Darren Jones MP, Labour’s Chief Secretary to the Treasury, remarking on the new revelations said:

“Billions of pounds of taxpayers’ money was lost to fraud and corruption during the pandemic on Rishi Sunak’s watch. And yet, the Conservatives are turning a blind eye and letting those responsible off the hook.

“Unlike this out of touch Conservative government, Labour understands the value of taxpayers’ money. That is why we will appoint a Covid Corruption Commissioner with the powers to get that money back and put it back where it is needed in our schools, hospitals and police.”

Notes for Editors:

• Minister Julia Lopez remarks: https://www.gov.uk/government/news/new-hotline-launched-to-report-covid-fraudsters
• PSFA Annual Report: https://www.gov.uk/government/publications/public-sector-fraud-authority-annual-report-2022-2023
• a figure that was buried in the PSFA's annual report for 2022/23, published on 13 November.
• Emily Thornberry’s Parliamentary question response: Parliamentary Question 
• Keith Morgan Warnings: https://www.british-business-bank.co.uk/wp-content/uploads/2020/09/200502-BBB-BBLS-reservation-notice-FINAL-tagged.pdf
• The latest central estimate for Covid-related fraud in government support schemes is estimated to be to be £7.2bn by House of Commons Library analysis of government reports and is broken down by scheme:
• Despite the number of reported fraud offences in England and Wales increasing from 441,174 in 2012 to 3.7 million in 2022 (according to the Crime Survey for England and Wales), the number of offenders successfully prosecuted for fraud over the same period has fallen from 12,378 to 3,455, according to Ministry of Justice data.
• resigned his position in January 2022
• The number of those convicted offenders sentenced to jail for fraud has more than halved, from 2,629 in 2012 (one for every 168 offences committed in that year) to 1,177 in 2022 (one in 3,144), a decline of in the jail rate for offences of 94.6 per cent. 
• In their fraud strategy, published in May, the Home Office admitted that “currently, for every 1,000 estimated frauds committed there is one successful prosecution.”
• In June, the independent UK Fraud Costs Measurement Committee published the first comprehensive analysis in six years of the total losses caused by fraud across every sector in the UK, estimating that they had risen 15 per cent, from £190 billion in 2017 to £219 billion this year, including more than £50 billion lost to public sector fraud.