How we can recoup the billions of pounds lost to fraud, waste and dodgy contracts during Covid - Rachel Reeves

The hearings at this week’s Covid-19 inquiry about the Government’s handling of the pandemic have been shocking. Evidence from former advisers, including Dominic Cummings, have lifted the lid on an administration presided over by Boris Johnson and Rishi Sunak that was riddled with dysfunction, incompetence and chaos.

We learnt that the former Prime Minister was absent from key meetings for ten days in the month before the first lockdown. Officials told the Inquiry that there was no plan in place to respond to the pandemic, despite repeated reassurances and promises from the then Health Secretary Matt Hancock. Conservative advisers and ministers spent more time fighting amongst themselves behind the door of Number 10, than they did fighting to protect people’s lives. And then we heard serious allegations of staff being treated to insulting, misogynistic and inappropriate behaviour from Boris Johnson’s team. The evidence is shocking - if not unsurprising.

We have known about much of this dysfunction for many, many months. The lockdown parties in Downing Street that took place when the rest of us were staying at home, the dithering and delay that meant we introduced restrictions too late, and the incompetence of a Prime Minister who failed to act and behave in the national interest during the biggest crisis we had faced as a nation since the Second World War.

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What angers me most about the evidence we have heard is that it is the British people who have paid the price for the Government’s failures. Nurses who didn’t receive the proper protective equipment, our care homes left exposed to the virus for too long and businesses that struggled to navigate the chopping and changing of decision-making.

People walking past a Government sign warning people to stay at home during the pandemic in 2021. PIC: Andrew Matthews/PA WirePeople walking past a Government sign warning people to stay at home during the pandemic in 2021. PIC: Andrew Matthews/PA Wire
People walking past a Government sign warning people to stay at home during the pandemic in 2021. PIC: Andrew Matthews/PA Wire

The Inquiry’s work will continue for many more months to come and it’s important we allow it to do its job and to reach its own conclusions. However, there is action that the Government could be taking now to learn from the mistakes of the past, including to recoup the billions of pounds lost to fraud, waste and dodgy contracts.

The House of Commons’ Library has estimated that £7.2bn taxpayers’ money was lost to fraud from the Government’s Covid-19 support schemes, including furlough, business grants and Rishi Sunak’s ‘eat out to help out’ programme. The suspension of the government’s usual procurement processes during the pandemic in favour of a highly secretive ‘VIP fast lane’ for goods resulted in billions of pounds being misspent. £8.7bn alone was wasted on the purchase of unusable, unsatisfactory, or overpriced personal protective equipment (PPE).

And serious concerns have been raised about the recipients of pandemic related contracts that were signed off by ministers, including Rishi Sunak. Analysis conducted by the Labour Party reveals that £3.5bn of Covid-19 related contracts were awarded to businesses with direct affiliation to the Conservative Party, including some party donors.

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Despite the scale of money lost, the cross-party Public Accounts Committee found that only 2 per cent of fraudulent Covid business grants have been recovered to date. Lord Agnew resigned from Rishi Sunak’s Treasury over the lack of action to recoup taxpayers’ money and the business secretary Kemi Badenoch criticised the then chancellor for dismissing her concerns over possible fraudulent loans.

Rishi Sunak might not take this issue seriously, but, as Labour’s shadow chancellor, I do. I am not willing to turn a blind eye to public money being wasted or misused. This is taxpayers’ money that belongs in our NHS, our schools and our police. That is why at the Labour Party conference last month, I announced my plans to get back the money that was lost during the pandemic.

That starts with the appointment of a Covid Corruption Commissioner who will be responsible for tracking down public funding that has gone missing because of waste, fraud and dodgy contracts. The Commissioner will examine contracts line by line and be given the mandate to bring together agencies and direct efforts to ensure justice for taxpayers. The Commissioner will work with HMRC, Serious Fraud Office and the National Crime Agency and any other public agency they deem appropriate or necessary.

But, I want to go further. It’s not enough to simply fix the mistakes of the past, we need to make sure they never happen again. Under a Labour government, those complicit in fraudulent mishandling of public funds would be subject to the full force of the law. We would review sentencing laws and introduce measures to ban anyone found to have committed fraud from being granted future contracts. A Labour government would also introduce greater oversight of public grant and loan schemes to prevent financial losses in the future. This would include the involvement of counter-fraud experts.

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These measures are more than just about recouping taxpayers’ money. It is about restoring public faith in our politics. The Covid-19 Inquiry is yet the latest reminder of thirteen years of failure under the Conservatives.

At a time when people should have faith in the Government to lead, they have been let down time and time again. Families are worse off because of a decade of low economic growth, millions are stuck on hospital waiting lists and our streets feel less safe.

Rachel Reeves is Labour’s Shadow Chancellor of the Exchequer and Member of Parliament for Leeds West