MPs have warned that the furlough scheme was hastily developed due to an ‘astonishing lack of economic planning for a pandemic’, and may have led to the loss of billions of pounds of taxpayers money through fraud and error.

The Metro reports that the Commons Public Accounts Committee has said that almost 10 per cent of the £35.4 billion paid out that had provided a lifeline to millions could have been affected, according to estimates from Her Majesty’s Revenue and Customs (HMRC).

“We make no apology for the speed at which they were delivered,” a spokesman said, adding that the government had rejected ‘thousands of fraudulent claims’. “Without them, lives would have been ruined.”

The furlough scheme, which has due to end on 31 October, was developed to pat 80 per cent of the wages of employees at firms forced to close by the pandemic. The latest figures show that £39.3 billion was sent to 1.2 million employers up to 20 September.

But a recent estimate by HMRC has suggested that up to 10 per cent of the money delivered by the scheme to mid-August – £3.54 billion – may have been paid out in fraud or error.

The Commons Public Accounts Committee, which reviews government expenditure, described the figure as ‘very worrying’, and that the government should have been better prepared for the economic fall-out from COVID-19, as a pandemic has been at the top of the national risk register for years.

According to the committee, when the outbreak occurred, HMRC moved staff from frontline tax collection activities to helping guide taxpayers through the various COVID support schemes, which has damaged the government’s ability to collect revenue.

HMRC estimates the revenue collected through its compliance work in the first three months of the tax year 2020-21 was down 51 per cent on the same period the previous year and warned the sums may never be recovered.

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