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Lord Agnew quits over Treasury’s ‘schoolboy errors’ on Covid fraud - 25.01.22

Minister accuses government of ignoring repeated warnings

This article from the Times by Oliver Wright, Policy Editor | Chris Smyth, Whitehall Editor caught my eye as a Chartered Accountant and am appalled but I am not at all surprised by it as there have been a number of reports over the past two years highlighting some contracts placed with some very dodgy people as well as to members of what is now called the "chumocracy" whose competence must be questioned.

Boris Johnson’s counter-fraud minister has quit at the dispatch box, attacking the government’s “desperately inadequate” efforts to stop taxpayers’ money being stolen during the Covid pandemic.

Lord Agnew of Oulton, who has served as minister for efficiency and transformation since February 2020, accused the government of “schoolboy errors” such as giving Covid loans to companies that were not trading during the pandemic.

He said that the Treasury appeared to have “no knowledge or interest in the consequences of fraud to our economy or society” and that the government machine had been “almost impregnable” to his “endless exhortations” to take the issue seriously.

He added that the total cost of fraud to the taxpayer was estimated to be £29 billion a year but that “a combination of arrogance, indolence and ignorance freezes the government machine” in dealing with the problem.

“[It] is my deeply held conviction that the current state of affairs is not acceptable,” he told the House of Lords.

“Given that I’m the minister for counter fraud, it feels somewhat dishonest to stay on in that role if I’m incapable of doing it properly, let alone defending our track record. It is for this reason that I’ve suddenly decided to tender my resignation as a minister.”

Agnew then handed a resignation letter to a fellow frontbencher before walking out of the chamber to rare applause from peers.

Agnew’s resignation came as he was answering an urgent question in the Lords after The Times revealed last week that the Treasury expects to recover only £1 of every £4 stolen from the public purse by fraudsters during the pandemic.

The department has written off £4.3 billion of the £5.8 billion that was stolen from its emergency Covid schemes, which propped up swathes of the workforce during successive lockdowns, including the furlough scheme, the self-employed income support programme and Eat Out to Help Out.

This means that a maximum of only 26 per cent of money unlawfully taken from the Treasury will be recovered.

In his resignation letter to Johnson, first reported by the Financial Times, Agnew insisted his resignation was “not an attack on the prime minister” and was in “no way linked” to the other scandals embroiling the government.

“Any prime minister of this country should be able to reasonably expect, when taking on the mantle of power, that the levers of government were actually connected to delivering services for our citizens,” he said.

The former minister called for “urgent improvements” in lending data, “far greater challenge” of lender banks when inconsistency in the data is detected and further training of Treasury and Department for Business, Energy and Industrial Strategy (BEIS) officials in counter fraud.

Agnew criticised “woeful” oversight by BEIS, saying the department employed only two counter fraud officials at the start of the pandemic, “neither of who were experienced in the subject”. He alleged that they refused to engage with the Cabinet Office’s counter fraud team.

He warned of a “new and dangerous phase” in the Bounce Back Loans Scheme (BBLS) as banks were able to claim the cash from the loan guarantees without “a standard bar of quality assurance on what we expect as basic counter fraud measures”.

Agnew noted that more than 1,000 companies who received loans were not trading before the pandemic began. BEIS estimates suggest that overall losses due to fraud and companies being unable to repay loans across all Covid schemes were likely to amount to almost £20 billion, with about £17 billion of these losses related to the BBLS.

The BBLS has been criticised by public spending watchdogs for giving full government guarantees on loans handed out with only minimal checks on the borrower’s identity.

No 10 thanked Agnew for his “significant contribution” to the government.

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Lord Agnew quits over Treasury’s ‘schoolboy errors’ on Covid fraud - The Times 25.01.22
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Lord Agnew in the House of Lords

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