Furlough was first implemented by the government to provide financial assistance to those affected by the COVID-19 pandemic. Original rules provided employees with 80 percent of their salary covered up to £2,500 per month, although government support was gradually reduced over time. To receive the money for their workers, employers were told they must follow the rules, with employees not permitted to work for the company during the time they were furloughed.
Gareth Davies, the head of the NAO commented on the matter, saying: “Indications are that the schemes helped to protect jobs in the short-term, but it is also clear that many other people have lost earnings and have not been able to access support.
“HMRC could have done more to make clear to employees whether their employer was part of the furlough scheme.
“In future, the Departments should do more while employment support schemes are running to protect employees and counter acts of fraud.”
To tackle instances of fraud, HMRC set up a hotline, encouraging Britons to report any suspicions for a potential follow-up.
The NAO said this hotline had thus far received over 10,000 reports, with many referencing cases where employees worked despite being furloughed.
But the impacts of furlough fraud also sadly extend beyond employees, and could be far-reaching.
In addition, the report also revealed more than £3billion of furlough job protection money may have been stolen by criminal gangs and employers.
The NAO said up to £2billion of the money from taxpayers may have gone straight to criminals who have established fake companies to syphon money.
Gus Tomlinson, General Manager of Identity Fraud, Europe, at GBG commented on the news.
He said: “The furlough scheme has provided a lifeline for 1.2 million employers, which has been vital for people across the UK.
“But even with these unprecedented circumstances, the fact that 10 percent of furlough money was wrongly awarded shines a light on the need for more vigilant fraud checks across the board.
“Ultimately, the use of furlough fraud during this pandemic highlights the opportunity for the private sector and the government to work closer together to stop fraudsters.
“Underpinning this is the importance of improving digital identity in the UK. For example, if the government were able to quickly match applications to the furlough fraud scheme by cross checking with wider records, such as tax or Universal Credit schemes, then we would be better set up to significantly reduce fraud.”
An HMRC spokesperson told Express.co.uk this week that the government’s key priority was to extend support to those who need it as quickly as possible.
They added: “Our income support schemes have provided a lifeline to millions of hard working families across the UK and we make no apology for the speed at which they were delivered. Without them lives would have been ruined.
“Our schemes were designed to minimise fraud from the outset and we have rejected thousands of fraudulent claims. We will not tolerate those who seek to defraud taxpayers and will take action against perpetrators – including criminal prosecution.”
The furlough scheme, after months of support, will come to a close on October 31.
However, an alternative method of help, in the form of the government’s new Job Support Scheme is intended to be a replacement measure.