How Billions Were Lost While Millions Were Locked Out
Introduction
The UK Government has finally put a number on the cost of Covid fraud and error. The Final Report of the Covid Counter-Fraud Commissioner titled Pursuing Recoveries and Preventing Reoccurrence; confirmed what many taxpayers had long suspected. Vast sums of public money were lost, misused or written off during the pandemic, often with full knowledge that controls were weak and risks were being accepted.
For the Excluded taxpayer community, this report lands not as a revelation, but as confirmation. Confirmation that while billions were paid out at speed to companies, contractors and intermediaries, millions of ordinary taxpayers were deliberately denied support. Confirmation that the government’s stated justification for exclusion, the risk of fraud, collapses under scrutiny. And confirmation that exclusion was not an unfortunate side effect of emergency policymaking, but a conscious political choice.
This article examines the Covid Counter-Fraud Commissioner’s findings through a close lens from the Excluded community perspective. It sets out the scale of loss, where the largest sums went, and how fraud was tolerated in practice. It then contrasts this with the treatment of those who were excluded from support despite paying into the same system as everyone else.
The conclusion is unavoidable. The Excluded were not fraud risks. They were victims of wilful discrimination by the UK Government.
The Headline Numbers the Government Can No Longer Avoid
The Commissioner estimates that £10.9 billion was lost to fraud and error across Covid related spending. Of that amount, only £1.8 billion has been recovered. Much of the remainder is now deemed unrecoverable, not because fraud did not occur, but because the state failed to act quickly, decisively or consistently enough to recover public money.
These losses sit within an overall pandemic spend of approximately £376 billion. But percentages matter less than priorities. £10.9 billion is not an abstract accounting figure. It is more than three times the annual NHS maternity and neonatal budget in England. It is equivalent to a large share of the mental health budget. It dwarfs the cost of providing targeted support to those who were excluded.
The Commissioner makes clear that these losses were not unforeseen. Fraud risk was identified early. In many cases it was explicitly accepted at ministerial level as the price of speed.
Speed, however, was never extended to the Excluded.
Where the Biggest Losses Occurred
PPE Procurement and Over Ordering
The largest and most visible losses arose from PPE procurement. The Department of Health and Social Care purchased more than 38 billion items of PPE between February and July 2020. By March 2024, 11 billion items had still not been used. The department estimates total losses of £10 billion from over purchasing, write downs and write offs.
Fraud within PPE procurement is officially estimated at £324 million. On paper, this represents around 2.4 per cent of total PPE spend. But this figure obscures reality. Once over ordering is stripped out, fraud accounts for approximately 8.5 per cent of the net value of PPE actually used at normal prices.
The UK was unprepared. Emergency stockpiles were inadequate. Visibility of frontline supplies was poor. In response, the government committed to purchasing a year’s worth of PPE at crisis prices, at speed, from a global market already under extreme pressure.
This approach dramatically increased the likelihood of fraud, profiteering and failure. Unknown suppliers were engaged. Due diligence was minimal. Warehousing capacity was overwhelmed. Containers sat unopened for months or even years, undermining any realistic prospect of contract enforcement.
The High Priority Lane and Public Trust
The High Priority Lane, sometimes referred to as the VIP lane, allowed suppliers referred by ministers or officials to be fast tracked. While the Commission concludes that contracts awarded through this route were no more likely to be disputed than others, it also acknowledges that the scheme undermined public trust and departed from basic procurement standards.
Transparency was lacking. Contracts were published late or not at all. In a crisis where public money was being spent at unprecedented scale, this absence of openness mattered.
PPE Medpro and Michelle Mone
No case better illustrates the imbalance at the heart of pandemic spending than PPE Medpro. The company, linked to Baroness Michelle Mone through her husband Douglas Barrowman, received government contracts worth more than £200 million to supply personal protective equipment at the height of the crisis.
In October 2025, the High Court ruled that PPE Medpro had breached its contract to supply 25 million surgical gowns during the pandemic and ordered the company to repay £148 million to the Department of Health and Social Care. That ruling confirmed what frontline workers and taxpayers had long suspected: that vast sums had been paid out for equipment that was not fit for purpose or not delivered as contracted.
Yet in December 2025, only weeks after the judgment, PPE Medpro was placed into liquidation at the Insolvency and Companies Court. The company had filed for administration a day before the High Court order to pay, a move that effectively shielded most of its assets from recovery. Administrators’ filings revealed that the company held only around £600,000 to pay unsecured creditors.
The Department of Health and Social Care, despite being owed £148 million, now stands as an unsecured creditor and is unlikely to recover more than a fraction of the money. HM Revenue and Customs is separately owed £39 million in unpaid tax, which is similarly at risk of being written off.
At court, government lawyers described PPE Medpro as “hopelessly insolvent” and successfully argued for it to be wound up rather than remain in administration. The legal reality is stark. Despite a clear finding of contractual breach and a court ordered repayment, most of the public money will almost certainly never be recovered.
For the Excluded community, this outcome matters profoundly. A company with political access and no established PPE track record was trusted with enormous contracts at speed. When those contracts failed, the system proved incapable of securing meaningful recovery. Meanwhile, millions of ordinary taxpayers who had paid into the system for years were denied support altogether on the basis of hypothetical fraud risk.
This is not simply a story of procurement failure. It is a demonstration of where the state chose to place trust, and where it did not. The contrast is stark.
Loans, Grants and the Acceptance of Fraud Risk
Bounce Back Loans
The Bounce Back Loan Scheme distributed £46.5 billion through 1.5 million loans. It relied heavily on self certification, with limited checks on turnover, eligibility or use of funds. Fraud and error are estimated at up to £2.8 billion.
Multiple loans were issued to the same businesses. Inactive companies received funds. Turnover was inflated. Controls that could have prevented significant losses were introduced months too late.
Crucially, these risks were known. Ministerial Directions were issued to proceed despite objections from Accounting Officers. Fraud was accepted as an acceptable cost of speed.
Grants and Local Authority Delivery
Grants administered through local authorities suffered from inconsistent controls and variable capacity. Some councils performed well. Others did not. Central government lacked a clear picture of fraud and error levels and, in many cases, declined responsibility.
Yet even here, recovery efforts continue. Investigations persist. Mechanisms exist to claw back funds paid in error.
Who Were the Excluded
The Excluded were not a single group. They were created by policy choices that drew arbitrary lines through working life.
They included new starters, freelancers paid through PAYE, newly self employed people, company directors paid via dividends or annual PAYE, those denied furlough, people made redundant shortly before cut off dates, directors of companies not in profit, the self employed earning just over the £50,000 cap, businesses ineligible for grants, people on maternity, parental or adoption leave, carers, students, veterans, and those with mixed income streams.
What unites these groups is not behaviour. It is circumstance.
Randomness Disguised as Risk Management
The government justified exclusion on the basis of fraud risk. But the categories of exclusion expose that rationale as incoherent.
There is no evidence that someone on maternity leave is more likely to commit fraud. No logic that a person earning £50,001 is less trustworthy than someone earning £49,999. No justification for excluding those who had recently changed jobs or business structure.
This was not risk based policymaking. It was administrative convenience elevated into moral judgment.
The Excluded community understands this as wilful discrimination. The government may call it a policy decision, but it has never articulated a credible fraud rationale because none exists.
Hypothetical Fraud Versus Real Fraud
The most damaging contrast revealed by the Commissioner’s report is this. Where fraud was hypothetical, involving the Excluded, it was treated as an absolute barrier. Where fraud was real, documented and ongoing, it was tolerated, delayed and in many cases written off.
No post payment recovery scheme was ever offered to the Excluded. No opportunity to demonstrate eligibility. No mechanism to correct for unfairness.
The message was clear. Some taxpayers were worth the risk. Others were expendable.
Accountability Without Consequence
The Commissioner acknowledges uneven recovery efforts across government. Some departments acted quickly. Others did not. Much money is now beyond reach.
What is missing from the report is any reflection on the human cost of exclusion. The collapse of livelihoods. The depletion of savings. The long term damage to trust in the tax system.
The Excluded paid into the same system as everyone else. They were denied support not because of fraud, but because of who they were at a particular moment in time.
Conclusion
The Covid Counter-Fraud Commissioner’s report closes one chapter of the pandemic. For the Excluded, it opens another.
It confirms that billions were lost where risk was accepted. It confirms that recovery has been partial and slow. And it confirms that exclusion was never about protecting the public purse.
The Excluded were not fraud risks. They were victims of wilful discrimination by the UK Government. That truth now sits in black and white, whether ministers choose to acknowledge it or not.
