Only a fifth of the £4.7 million in rogue Covid incentive payments given to employers to hire apprentices and trainees has been recovered.
An independent report by Covid counter-fraud commissioner Tom Hayhoe found the now-closed Education Skills Funding Agency (ESFA) had recouped £1 million of taxpayer money lost to fraud and error from its pandemic recovery schemes.
His report, which found a total of £10.8 billion of public money was lost to fraud, lambasted government departments’ unpreparedness for the crisis and “inadequate” measures to protect against criminality.
Hayhoe criticised some public bodies’ “inconsistent” approach to fraud risk assessments. Be he praised the Department for Education’s review of fraud dangers by “experienced” counter-fraud professionals.
Under the Conservative government, the DfE introduced employer cash incentives of £1,000 for each traineeship learner taken on in 2020, which could be claimed until the end of July 2022.
Then-chancellor Rishi Sunak concurrently unveiled a £2,000 bonus for employers who hired apprentices aged 16 to 24, and £1,500 for apprentices aged over 25 who were taken on for six months. The incentive for older apprentices was later doubled to £3,000.
The DfE spent £7.2 billion on Covid support, administered mostly by the ESFA, for emergency measures such as distributing laptops to vulnerable students, online classroom resources and employer incentives for traineeships and apprenticeships.
The department later conducted an assurance review of priority spending areas in the 2021-22 financial year.
Hayhoe’s report said the DfE found £9.7 million of detected fraud and error in total from its Covid spending, with £5.1 million recovered so far.
Alongside the ESFA’s £4.7 million lost to fraud and error for apprenticeship and trainee incentives, the report also detailed the recovery of £200,000 from “erroneous” payments made for exceptional costs to schools.
Hayhoe advised the DfE should continue to pursue bogus employer incentive payments, and said the department should use its extended legal powers to enforce recovery.
The public authorities (fraud, error and recovery) act received royal assent last week and creates new powers for government departments to tackle fraud, as well as adding an additional six years to the period during which actions against Covid-19 fraud can be taken.
“Where the pursuit of civil recovery has been unsuccessful, the department should consider utilising external enforcement resourcing given the extension of the statute of limitations granted by [the act],” Hayhoe recommended.
The DfE declined to comment.
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