The government has no contemporary estimate for the level of fraud and error in a pandemic employment scheme, despite concerns that rogue suppliers and employers may have exploited it to steal funds from the taxpayer.
The Department for Work and Pensions has admitted that it has not done any work to understand the value of losses, or even an estimated rate of loss, since the launch of Kickstart in 2020.
The programme provided funding to employers to create jobs for those aged 16 to 24 on benefits and at risk of long-term unemployment. About 163,000 roles were started by young people, against an prediction of 250,000.
There are concerns about the performance and oversight of the scheme, with the Commons’ public accounts committee having called it “chaotic”.
In response to a freedom of information request from The Times, the department said its only assessment of fraud and error losses related to work done before the scheme’s launch, which put such losses at about 3 per cent.
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“This was an assumption based on no controls being put in place and was an estimate of maximum risk exposure. We embedded a number of controls and checks to reduce the risk of fraud and error,” it said.
The scheme was meant to tackle a forecast surge in youth unemployment at the end of the emergency wage furlough scheme and provided funding for employers to support work placements of at least six months for young people working at least 25 hours a week.
It was originally expected to cost £1.9 billion, but costs are likely to be lower than anticipated since it has supported fewer young people than envisaged.
MPs have expressed concerns that the government failed to “put in place basic management information that would be expected for a multibillion-pound programme” and had little idea what employers were doing in return for the £1,500 grants they received for each young jobseeker they employed.
There have been reports of fake roles being created to claim the grant and of employers keeping government subsidised wages meant for young people. Concerns have been expressed about the quality and oversight of intermediary firms that matched young people with employers, with some appearing to have little or no trading history.
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In its response to the freedom of information request, the government refused to disclose the identity of “gateway” firms, claiming the public interest in identifying them was outweighed by that of “ensuring that disclosure does not compromise the department’s ability to work with employers and to ensure best value for money”.
Dame Meg Hillier, chairwoman of the public accounts committee, said the government was “using the idea of commercial sensitivity to hide the identity of companies that took public money. What is there to hide about how public money was used to support the economy in this emergency?
“[The department’s] record on fraud was extremely poor long before the pandemic, but the Kickstart checks failed to catch even some organisations that didn’t exist before they applied for grants.”
The scheme was closed this year.
A spokeswoman for the department of work and pensions said: “The scheme provided tens of thousands of young people with life-changing opportunities at a time when they might otherwise have faced the scarring impact of long-term unemployment.
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“Anti-fraud measures put in place during the scheme were proportionate and followed broader government guidance. While the vast majority of grants were spent correctly, DWP is rigorously focused on identifying the limited cases of misspend and ensuring funds are returned to the public purse.”
