Watch: Only 1% of missing £1.1 billion Covid loans have been recovered

Only 1% of the estimated £1.1 billion of taxpayer cash lost to fraudulent or erroneous grants paid to businesses during the pandemic has been recovered, Whitehall’s spending watchdog has said.

The former Department for Business, Energy and Industrial Strategy (BEIS) initially did not require pre-payment checks when it started the handouts to firms that said they were hit by lockdowns in March 2020.

Ninety percent of the losses due to error and fraud arose during that first wave of Covid-19 grant schemes, the National Audit Office (NAO) said in a new report, while checks and improved data reduced the risk in later iterations.