How can we keep COVID grants out of the hands of fraudsters?

The Government announced a new Covid –19 support package on 21 December 2021 for businesses. This supplements the packages announced in the recent Autumn Budget and Spending Review in which the Government announced new temporary business rates relief in England for certain business properties, posing a potential fraud threat to the public purse.

• Businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premises, plus more than £100 million discretionary funding will be made available for local authorities to support other businesses

Around 200,000 businesses will be eligible for business grants which will be administered by local authorities and will be available in the coming weeks.

To support other businesses impacted by Omicron – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100m boost to the Additional Restrictions Grant (ARG) fund for local authorities in England.

Local Authorities will have discretion to allocate this funding to businesses most in need. The ARG top up will be prioritised for those local authorities that have distributed the most of their existing allocation.

These additional measures will reinforce the existing package of business support, including:

• business rates relief meaning that the majority of businesses in the hospitality and leisure sectors will see a 75% reduction in their business rates bill across the entire financial year and a new 50% capped business rates relief next financial year;
• the £1.5bn Covid Additional Relief Fund for businesses that have not previously had business rates support;
• businesses will be protected from eviction if they are behind on rent on their premises, thanks to the moratorium in place until March 2022;

Business rates are charged on most non-domestic properties, such as shops and offices, with bills to be sent by local councils in February or March 2022. Businesses wishing to make the most of this support will need to apply through their local council to discuss their eligibility.

It is therefore vital Local Authorities are ensuring relief is only given to those who meet the criteria of the assistance. There is a risk to Local Authorities that businesses may falsely claim their business is entitled to this relief and consequently defraud the taxpayer.

Throughout the pandemic, Cifas has worked with almost 50 Local Authorities to screen applicants for financial relief against the National Fraud Database (NFD). The NFD is the UK’s largest database of fraud risk intelligence, with hundreds of thousands of cases filed by Cifas members each year. This includes instances of first-party fraud which suggest a propensity for dishonesty, such as by submitting false applications or misusing a banking facility. By screening business rates relief applicants against the NFD, Local Authorities can swiftly identify high risk applications which may require further investigation prior to approval of the business rates relief.

During the pandemic, Local Authorities received significant value from the checking service Cifas provided. Over 400 applications returned positive matches to Local Authorities which weren’t previously in Cifas membership, including matches to individuals previously identified as attempting to defraud public funds through Business Bounceback Loans.

Any Local Authority wishing to discuss how Cifas can assist them in identifying fraud risks to public funds can contact us.