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The UK government admits that £10.9 billion was lost to fraud across covid support schemes.  However, research has shown that, plausibly, there was £37 billion lost to covid fraud.

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We Warned About Covid Fraud Four Years Ago. Now the Government Agrees

By Carl Heneghan and Tom Jefferson, as published by Trust the Evidence

In June 2026, the Government quietly published its response to the Covid Counter Fraud Commissioner’s report. It deserves far more attention than it has received. Buried within its 28 pages is an extraordinary admission: the British state was systematically unprepared for the largest fraud against the public purse in modern history.

Four years ago, in November 2022, Trust the Evidence published a detailed investigation into covid fraud. We argued that the losses were likely to be vastly greater than official estimates, that fraud controls had been abandoned in the rush to spend, that responsibility was fragmented across Whitehall, that Companies House had become an enabler rather than a barrier to fraud, and that the Government lacked both the appetite and the institutional machinery to recover what had been stolen.

The Government has now accepted almost every one of those arguments.

It is gratifying to be proved right; It is rather less gratifying that it has taken four years.

The official estimate now stands at £10.9 billion lost to fraud and error across Covid support schemes, although the Public Sector Fraud Authority acknowledges that the true losses are likely higher. Only £1.8 billion has been recovered so far.

But here lies the first problem.

The Government continues to rely on a remarkably conservative accounting framework. It counts losses that can be demonstrated within individual schemes, but not the broader ecosystem of fraud that flourished when normal controls were suspended.

Our analysis took a different approach: We assembled evidence from National Audit Office reports, Public Accounts Committee hearings, Treasury evidence, Lord Agnew’s testimony, HMRC data, Companies House records, Action Fraud, Freedom of Information requests and contemporaneous investigative reporting. Rather than viewing each scheme in isolation, we examined the entire pandemic spending landscape.

The picture that emerged was alarming.

We estimated that losses could plausibly approach 10 per cent of the £370 billion pandemic expenditure—around £37 billion. That estimate included not only identified fraud but also the predictable consequences of dismantling verification systems, encouraging self-certification, creating 100 per cent government-backed lending, relaxing welfare controls, and allowing thousands of new companies to be created with minimal scrutiny.

That estimate was criticised at the time as speculative. Indeed, the government put in a complaint, making sure it wasn’t backed by the University of Oxford – instead, it was just the two old geezers [Carl Heneghan and Tom Jefferson].

Yet the Government’s own report now accepts virtually every mechanism that underpinned our analysis.

It acknowledges that fraud controls were not embedded in emergency planning. It accepts that crisis decision-making lacked effective challenge. It admits data sharing between departments was inadequate. It proposes reforms to Companies House. It expands counter-fraud powers. It establishes specialist investigation teams. It creates independent oversight. It rewrites Treasury guidance so that fraud is considered from the outset of future emergency schemes.

In other words, today’s official reform agenda reads remarkably like yesterday’s unofficial diagnosis.

One of the most striking examples concerns Companies House.

In 2022, we analysed incorporation data and found tens of thousands more companies had been created than historical trends would predict, while dissolutions temporarily fell, leaving almost 400,000 additional companies on the register. We never claimed these were all fraudulent. But they represented precisely the sort of anomaly that deserved urgent investigation because they coincided with schemes requiring little more than an email address and a newly registered company to obtain taxpayer-backed loans.

The Government now accepts that greater corporate transparency is essential for preventing future fraud. It has not gone as far as the Commissioner recommended, but even partial acceptance represents a remarkable shift from the complacency that characterised the pandemic years.

Equally revealing is the treatment of Lord Agnew’s evidence.

When he resigned in 2022, describing Treasury anti-fraud efforts as “Dad’s Army,” many regarded the criticism as a rhetorical flourish. We treated it as a warning from someone who had seen the machinery from inside the Government. His evidence highlighted fragmented responsibilities, inexperienced decision-makers and the abandonment of basic checks that would have delayed payments by only a matter of days.

The Government has now built an entire reform programme around precisely those deficiencies. However, the true scale of the losses remains unresolved.

The official £10.9 billion figure has an air of precision that is difficult to justify. Fraud on this scale cannot be measured like the national debt. Much of it remains undiscovered; some will never be discovered. Fraudsters dissolved companies, transferred assets abroad, exploited identity theft and took advantage of administrative systems that often lacked even basic verification. Estimating only what has already been identified risks confusing measurement with reality.

Our estimate was necessarily broader because the problem itself was broader. We were trying to understand the consequences of designing emergency programmes in an environment where ministers knowingly accepted weakened controls, existing fraud levels were already estimated at tens of billions annually, and experienced investigators warned repeatedly that criminal organisations were exploiting the opportunities being created.

No estimate is perfect, but an estimate that incorporates systemic vulnerabilities is arguably more likely to approximate the truth than one confined to losses that have been formally recognised so far.

Much of the Government’s response focuses on ensuring the mistakes are never repeated. New legislation, new investigators, new guidance, new oversight panels, new professional standards and new crisis playbooks are all welcome.

Yet, if these reforms are now considered essential, why were those warning about precisely these deficiencies dismissed four years ago?

Covid fraud was never simply a story about clever criminals. It was a story about predictable institutional failure. Trust the Evidence recognised that in 2022; the Government has now acknowledged it in 2026.

Better late than never, perhaps; but four years is a very long time in which to discover that independent investigators had seen the problem more clearly than the state itself – and that taxpayers are still paying the price.

About the Authors

Carl Heneghan is a professor of Evidence-based Medicine at the University of Oxford, Director of the Centre for Evidence-Based Medicine (“CEBM”) and NHS Urgent Care general practitioner (“GP”) who regularly appears in the media. Tom Jefferson is a clinical epidemiologist and a Senior Associate Tutor at the University of Oxford. Together, they publish articles on a Substack page titled ‘Trust the Evidence’.

Featured image taken from ‘£21bn of public money lost in fraud since covid pandemic began and most will never be recovered’, Sky News, 30 March 2023