Fake companies set up under false names. Phantom employees invented to claim compensation. Start-ups trousering loans for ventures that don’t exist. Meals that were never eaten. The British economy has been in a bad place for the last six months. But it turns out one small corner of the economy has been flourishing: defrauding the public purse.
The Chancellor’s extraordinarily generous range of schemes to keep businesses afloat may have been necessary to prevent a complete collapse in output. But they have also proved a bonanza for spivs, chancers and con men, and that too will have a cost.
We learned today that the ‘Bounce Back’ loan scheme may well have been defrauded to the tune of £26 billion – serious cash even for a government that has recently discovered the magic money tree. According to a report from the National Audit Office there were so few checks in place when the scheme was hurriedly put together that it was simple for fraudsters to set up a company in a borrowed name, take out a state guaranteed loan, and then disappear with the cash before anyone knew what was happening.
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