Rishi Sunak has not written off £14.9 billion in PPE fraud

4 October 2023
What was claimed

Prime Minister Rishi Sunak is writing off £14.9 billion of tax money on PPE fraud.

Our verdict

This is not correct. Although the true losses to PPE fraud are uncertain, they appear to be much lower. The £14.9 billion figure may relate to the impairment of DHSC stock across 2020/21 and 2021/22.

A string of posts on social media have claimed that Rishi Sunak wrote off £14.9 billion lost to personal protective equipment (PPE) fraud.

One user on X (formerly Twitter) posted on 11 September: “Rishi Sunak has decided that the £14.9bn of PPE fraud cannot be investigated and has written it all off.”

This post has been shared thousands of times, while similar claims have also been posted by other X users and on Facebook.

This figure is almost certainly much too high. Estimates from the Department of Health and Social Care (DHSC) imply, with some uncertainty, that fraudulent expenditure on PPE contracts probably amounted to much less.

The £14.9 billion figure may refer to an estimate for the total loss in value of DHSC stock. This is not a measure of fraud, and includes many things besides PPE.

We have checked a similar claim on the amount spent on PPE before, and have written a number of articles on personal protective equipment during the pandemic.

False or misleading claims online have the potential to harm confidence in democratic processes and institutions. Online claims can spread fast and far, and are difficult to contain and correct. 

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How much has been lost on PPE fraud?

We have found no evidence that £14.9 billion has been lost or written off in PPE fraud.

The DHSC’s annual accounts for 2021/22 say that an assessment of “high-risk” PPE contracts was carried out, covering 28% of the total PPE contracts awarded. This assessment identified a 1.7% “risk of loss” from fraud and error, with a value of around £38.4 million in those contracts.

Since these were high-risk contracts and not a random sample, DHSC says they “did not meet the fraud measurement and assurance standard”.

A case was classified as fraudulent on the balance of probabilities as set out in the Fraud Act 2006—made up of fraud by false representation, fraud by failing to disclose information and fraud by abuse of position.

The DHSC told the National Audit Office (NAO) that a further “compliance audit” of all its contracts suggested that as of November 2022 1.8% of its expenditure on PPE was fraudulent after “mitigations and recoveries”.

The NAO has said that this figure has not been “independently verified”.

DHSC also said it had prevented or recovered £157 million of losses in relation to PPE, but this was therefore not lost or written off.

The NAO says the government’s annual reports and accounts estimate total fraud against the taxpayer (not just relating to PPE spending) rose from £5.5 billion over the two years before the pandemic (2018/19 to 2019/20) to £21 billion in the following two financial years (2020/21 and 2021/22). 

These figures are uncertain and are most likely to be underestimates. They also exclude some types of fraud.

About £7.3 billion of the £21 billion relates to temporary Covid-19 schemes, which do not include PPE fraud. 

So PPE fraud will form part of the remaining £13.7 billion, which is the total across all government departments. We have seen no evidence to suggest PPE fraud makes up most of this.

Where does the £14.9 billion come from?

The £14.9 billion may refer to the DHSC’s estimated total impairment of Covid-19 stock—the drop in value of an asset—across 2020/21 and 2021/22.

This is not a measurement of fraud. It also includes other assets besides PPE.

The report from the Comptroller and Auditor General (C&AG) says that the most recent impairment was mainly down to a mixture of falling market prices and the DHSC having assets that it “no longer expects to use”.

Image courtesy of Luke Jones.

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