'Astonishingly' low level of fraud and error detected in Preston’s Covid business support grants

The man in charge of Preston City Council’s coffers says it is “astonishing” how little of the money handed out to businesses in the area during the depths of the pandemic was lost to fraud or error.

Thursday, 28th April 2022, 8:30 am

Cabinet member for finance Martyn Rawlinson told a meeting of the authority that just 0.4 percent of the more than £63m distributed by the town hall had been misclaimed or was subject to mistake.

Figures obtained separately from the authority by the Local Democracy Reporting Service (LDRS) reveal that the exact amount identified as fraud and error came to £260,000. Fraud accounted for £147,000 of the total - and £117,000 of that amount has already been recovered.

The LDRS understands that no prosecutions have been brought to date in relation to fraudulent activity and that the city council is continuing to pursue the outstanding £30,000.

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More than £63m of Covid business support cash has gone out via Preston City Council over the last two years

Local authorities were charged with administering a slew of government business support schemes to help keep firms afloat when full lockdowns or partial restrictions forced them either to close or lose significant levels of custom.

Cllr Rawlinson told members that Preston City Council had been involved in distributing dozens of different categories of support funding, which included restart grants and, most recently, cash to help businesses during the first part of the Omicron wave either side of Christmas.

“If anyone knows anything about civil service fraud and error, [Preston’s is] an astonishing figure. Average fraud and error across the civil service is at least two to three percent - and it's usually more.

“And if you compare this to the government Covid business loans scheme which has been in the news recently…the fraud and error [on that] is over 10 percent at £16bn - a lot of which will never be recovered.

“So any criticisms that we got [over our speed] in delivering Covid business grants, you have always got to find the balance between protecting public funds and obviously doing the best you can for the people out there who need the money.

“But…the way our staff and officers approached delivering this huge amount of work at such a difficult time - they just deserve a medal,” Cllr Rawlinson added.

Preston was one the first areas of the country to slip into a system of localised Covid restrictions in August 2020 in an attempt to stem a resurgence in the virus following the end of the first national lockdown earlier in the summer.

During the autumn, the city joined what ultimately became the whole of Lancashire under “Tier 3” restrictions, which had an impact on sectors including hospitality - with pubs and other venues allowed to remain open only if they served alcohol as part of a main meal.

Outlets such as children’s soft play centres, betting shops and nightclubs also had to shut up shop for months on end.

In Lancashire, the grant money made available to local authorities - which included a discretionary pot for distribution to badly affected businesses - was the subject of intense and tortuous week-long negotiations between council leaders and the government over how much the county should be entitled to for its Tier 3 status.