The Department for Business and Trade is writing off nearly £1 billion (£985 million) in fraudulent Covid-19 support grants, say MPs.

In a new report, the Public Accounts Committee (PAC) criticised the department for failing to recover these grants, which councils paid to local businesses during the pandemic.

The department estimates that many of these payments were "not in line" with how the business support grant scheme was meant to work. However, it does not expect to recoup the funds given that there was no "deliberate" fraud.

Of an estimated £2.2bn lost to fraud and error over the Covid-19 pandemic, the Government has only recovered around £10m.

The PAC urged the department to make "maximum use" of its resources to recover as much as possible and prevent the same mistake from happening again.

Commenting on the report, Oliver Simms of the Institute of Chartered Accountants for England and Wales, said:

"It is vital that the Government acts on the PAC's recommendations to recover as much as possible of the funds that were lost to fraud and error, and that lessons are learned for future schemes."

The Government has two months to respond to the committee's recommendations.

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