Credit: Nick Youngson/Alpha Stock Images/CC BY-SA 3.0

The UK government is to hire a team of data analysts to staff a new body aimed at cracking down on people that attempt to defraud the public purse.

Chancellor Rishi Sunak this week announced the launch of the £25m Public Sector Fraud Authority, which expected to be up and running by July. Those working in the organisation will be tasked with using data analytics to recover money stolen from Covid-related business support schemes as well as to spot suspicious companies and people seeking government contracts.

The Times newspaper today reported that around £4.9bn of the £47bn the government spent on bounce-back loans for businesses is thought to have been lost to fraud, with dozens of company directors being disqualified for misusing the scheme.

Related content

• HMRC expects to recover 40% of £5.8bn lost to fraud and error in pandemic support
• Government anti-fraud efforts hindered by ‘lack of real-time data sharing’
• ‘Simply unacceptable’ – MPs slam DWP over £8bn in benefit fraud during pandemic

An investigation by the newspaper found that numerous individuals transferred the cash to their personal accounts after taking out the loans and used the money to, for example, pay off gambling debts rather than to keep their businesses afloat.

A loophole also enabled new businesses to take advantage of the loan schemes, which were designed to help existing companies and not those that were established once the pandemic had started.

“We will chase down fraudsters who rip off the taxpayer,” Sunak said. “This elite fraud squad, backed by £25m, will ensure the latest counter-fraud techniques are being used to track down these criminals. People are rightly furious that fraudsters took advantage of our vital Covid support schemes, and we are acting to make sure they pay the price.”

The government is to start the process of appointing a chief executive for the Public Sector Fraud Authority in the coming weeks. The successful applicant will answer directly to Sunak and the minister for Brexit opportunities and government efficiency, Jacob Rees-Mogg.