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Commons committee urges Treasury to name UK firms that have taken furlough cash

Suban Abdulla
·4-min read
Britain's Chancellor of the Exchequer Rishi Sunak reacts during a media interview after arriving at the BBC in central London on November 22, 2020, to take appear on the BBC political programme The Andrew Marr Show. - Britain's debt is now at its highest level since 1961 as a share of GDP, after the government embarked on a massive spending spree to mitigate the economic effects of the COVID-19 coronavirus pandemic and resulting lockdowns. (Photo by Tolga Akmen / AFP) (Photo by TOLGA AKMEN/AFP via Getty Images)
Chancellor Rishi Sunak announced the Job Retention Scheme and the SEISS in March following the outbreak of the coronavirus pandemic. Photo: Tolga Akmen / AFP via Getty Images

The Public Accounts Committee (PAC) is calling on the UK Treasury to name the companies that have taken furlough money to see how the cash was spent.

In March, following the onset of the coronavirus pandemic, HM Treasury and HM Revenue & Customs rolled out the Coronavirus Job Support Scheme (CJRS) for businesses and their employees, and the Self-Employment Income Support Scheme (SEISS) for the self-employed.

The furlough scheme (CJRS) allows businesses whose operations have been impacted by COVID-19 to maintain their workers.

Firms can claim 80% of an employee’s usual salary for hours not worked, with the government covering up to a maximum of £2,500 ($3,380) per month in wages.

The CJRS, which was due to end in October 2020 has been extended until 30 April 2021 with claims for furlough days in December 2020 to be made by 14 January 2021.

So far, the CJRS and SEISS schemes have cost taxpayers £55bn. The independent Office for Budget Responsibility forecasts that extensions to the schemes announced by chancellor Rishi Sunak will cost a further £21bn.

READ MORE: Chancellor Rishi Sunak warns 'economic emergency has only just begun'

But, the PAC report says that despite the billions spent on the schemes as many as 2.9 million workers may have been excluded from CJRS and SEISS. It says that a combination of policy decisions, limitations in HMRC data and the prioritisation of speed contributed to millions of workers missing out on the money.

PAC says that HMRC “does not expect to have a statistical estimate of the total fraud and error levels” across the schemes until the end of 2021.

It is calling on the department to compile a list of firms which have signed up for furlough to estimate the levels of fraud and error.

Additionally, it wants HMRC to outline what steps it intends to take to recover CJRS and SEISS grants made during the first phase of the scheme if recipients made substantial profits or were not adversely affected by the pandemic.

Watch: What is the Job Support Scheme and how has it changed?

Although both schemes have been extended due to the prolonged impact of the pandemic, the Treasury department and HMRC have not yet produced evaluations of the initial CJRS and SEISS schemes.

As such, PAC is calling for a monthly performance report on the schemes, such as take-up by protected groups and employment outcomes.

The committee has urged HMRC and the Treasury to assess whether other data within and outside the tax system could be used to determine eligibility for the SEISS. Currently the scheme is based on 2018-19 tax return data submitted to HMRC by 31 January 2020.

PAC says that the government did not develop the schemes to make sure that assistance gets to all those who need it, despite the schemes being extended during the second lockdown in England.

It claims that many workers have “not received a penny of support since March.”

“HM Treasury is unable to provide even a ballpark official figure for extending the schemes, or explain how it will determine whether the money has been well spent. HMRC still does not know the actual level of fraud and error in the schemes and will not have a complete estimate until the end of 2021 at the earliest,” the committee said.

READ MORE: From £12bn to £280bn: How UK spending on COVID spiralled

HMRC started making CJRS payments from 20 April 2020, ten days ahead of its initial plans.

Meanwhile, self-employed could start claiming SEISS from 13 May, two weeks ahead of the initial timetable.

To date, CJRS has enabled 9.6 million jobs to be furloughed and at least 2.6 million self-employed people have claimed SEISS money.

Meg Hillier MP, chair of the PAC, said: “With billions of pounds of taxpayers’ money going into private companies to support jobs, the least we expect in return is transparency. That is doubly so when speed has been prioritised over effectively targeting support, or checks on the value it offers.

“With the Treasury claiming it can’t give even a ballpark figure for the cost of COVID job support until the end of next year, public scrutiny of where taxpayers’ money is going is essential. We want to see the list of the companies that have taken furlough money much sooner than that – in the next six weeks.”

“Many workers including freelancers and entrepreneurs have not had a penny and are really struggling as they continue to fall through the gaps. There is data that could be crunched to reach and help these individuals, many of whom will be unable to work at all under tier 3 restrictions.”

Watch: Why job losses have risen despite the economy reopening