Wigan Council paid out £375,000 in 30 fraudulent Covid business grant claims
Wigan council paid out £375,000 in 30 fraudulent claims for Covid-related support grants – around 0.55 per cent of the total amount paid to businesses.
The local authority has identified more than £1.1m in overpayments for 96 claims made as part of three government grant schemes it administered.
Most of these were payment errors and a further four were ineligble claims.
So far, the council has recovered around half a million pound in overpayments.
But £343,000 paid out to 28 fraudulent claims for grants is still oustanding.
It comes after the council handed around £80m in emergency financial support to businesses based in the borough during the coronavirus crisis.
Deputy chief executive Paul McKevitt told the audit committee this week that the council’s priority was to distribute the funding as quickly as possible.
He said: “We could have been tougher in terms of what we asked businesses for but we concentrated on getting the grants out.
“We’ve had other councils come and check with the team what we’ve done to see why we’ve done it quicker than everyone else.
“So that suggests to me that we’ve done well.”
According to a report presented to the audit committee, despite a number of validation checks built into the business grant application process, there was still an opportunity for claims to be made using other businesses’ information.
There were also 18 claims made by businesses which were no longer trading.
Five fraudulent claims for £110,000 were identified as related to ‘organised’ fraud and have been reported to the relevant fraud agencies for pursuance.
Conservative councillor Michael Winstanley who is leader of the opposition at the council, congratulated the town hall’s team for the ‘efficient’ way the government grants were distrubuted to business and organisations in Wigan.
He asked what would happen to any overpayments which are recovered and whether the chancellor would want the money back to ‘offset his deficit’.
Mr McKevitt said the council is waiting for guidance from the government.
He said: “It’s something we expected at the start so we set aside some money to cover this because I did feel that the driver was around issuing the grants.
“If we do recover it, I’m not sure yet, but I would imagine when the government do an audit they will reclaim that.”
Wigan council has already returned any allocated funds to the government.
In total, £715,000 was paid in error for 62 claims of which more than half has been recovered so far with £263,000 in overpayment still outstanding.
These errors can mainly be attributed to an ‘alignment error’ which resulted in payments being made to the incorrect bank account, a council report said.
This issue was quickly detected and rectified immediately by the introduction of additional controls to verify the correct bank account for the claimant before the payment was processed, according to the town hall report.
The overpayment of £75,000 attributed to ‘Ineligible Claimants’ relate to local businesses submitting legitimate claims for grant support – however, it was later found that the business did not fully meet the eligibility criteria.
These four claims were not classified as fraudulent because all information supplied by the claimant was considered accurate at the time, the report said.