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The Public Authorities Fraud Investigation and Enforcement Service (PAFIES) has begun pursuing suspected fraudsters, armed with the strongest investigatory tools in a generation.
Now, new powers will give investigators the ability to search the premises of suspected fraudsters and seize money directly from fraudsters’ bank accounts if they do not pay back what they owe. On top of that the window to pursue Covid fraudsters has been doubled from six to twelve years with all new powers becoming available to the government fraud squad this autumn.
The further action comes as measures introduced at the 2024 and 2025 Budgets are calculated to have protected £7.5 billion of public money from fraud over two years.
Chancellor Rachel Reeves said:
“In contrast to the last government, who left the door open to £10.9 billion of pandemic era fraud and error, we have taken action to protect £7.5 billion of public money.
“My message to those who owe the public purse money is clear – those who profited, will pay.”
Satvir Kaur, Parliamentary Secretary in the Cabinet Office said:
“Those who chose to exploit a national crisis to line their own pockets now have nowhere left to hide.
“Our decision to go after those who have cheated the system as part of our wider crackdown on fraud against public services has already helped save £7.5 billion. We will use every tool at our disposal to protect public money and fund the frontline services the British people rely on.”
The crackdown comes as the Chancellor announced the government’s response to the Covid Counter Fraud Commissioner’s final report, which laid bare the full scale of pandemic fraud. £10.9 billion— money that should have funded the NHS and our schools — was initially lost to fraud.
Nearly 2,000 company directors have already been banned and 86 criminals prosecuted to date.
Powers from the PAFER Act 2025 extended the limitation period for civil claims relating to Covid fraud against public authorities from six years to twelve, meaning that suspected fraudsters can be pursued until 2032.
The Act will also give the government fraud squad powerful new tools to tackle fraud, including enhanced investigation, search-and-seizure, and information-gathering powers, with the authority to compel information from third parties.
It also introduces civil financial penalties to accelerate enforcement and enables the direct recovery of fraud-related debts from earnings and bank accounts following a PSFA investigation.
Those who did not respond to Voluntary Repayment Scheme last year will now face the full force of the new powers in the autumn.
A Covid fraud reporting website, set up in September last year, has received over 1,000 reports of suspected fraud.
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