Postmaster payouts and Covid fraud: it's a mess, minister

Times

24-06-2025

Just what you want from a government department: as slow to compensate those wrongly accused of fraud as it is to recover losses from real fraudsters; quick to hand out millions of pounds of taxpayers' cash in 'business support' without a 'comprehensive understanding' of where the money has gone; and the home of a set of qualified accounts.
What is this repository of government efficiency, you ask? The Department for Business and Trade, at least according to two reports from MPs on the public accounts committee (PAC). Neither make pretty reading, not least for Jonathan Reynolds, the business secretary, a chap in charge of a department pivotal to both the government's 'primary growth mission' and its freshly launched industrial strategy.
Start at the top. The PAC finds that the department 'has not done enough to ensure compensation' for the victims of the Post Office Horizon IT system scandal, wrongly convicted of fraud, theft and false accounting. It was, as the committee's chairman Sir Geoffrey Clifton-Brown puts it, 'one of the UK's worst ever miscarriages of justice': a disgrace finally brought to the nation's attention by the TV drama Mr Bates vs The Post Office.
Yet, read the report and anyone would think a penny-pinching department was deliberately foot-dragging over the redress. Of the 800 or so postmasters who had their convictions quashed after the Post Office (Horizon System) Offences Act in May 2024, only 339 had accepted the fixed final redress of £600,000 by March 31 this year, others opting for a detailed claim assessment. The Post Office has also sent 18,500 letters to postmasters 'who were affected by financial discrepancies' relating to the earlier system but not convicted, where the fixed redress is £75,000. The response rate? Only 21 per cent.
The PAC found, though, that 'the department does not have any plans for following up with individuals who are, or may be, eligible to claim under these schemes but who have not yet applied'. On top, 25 of the 111 individuals whose wrongful convictions were later overturned by the courts may not have their claims dealt with until 2026 'due to the complexity of their cases'. Indeed, it's thanks to the 'significant uncertainty' over the size of the redress to come that the department had its accounts qualified.
• Post Office victims offered 'pathetic' payouts: 0.5% of their claims
It has been similarly lackadaisical over cases of real fraud. It expects 'a total loss of at least £1.9 billion' owing to abuse of the 'Bounce-Back Loan Scheme', offering small firms up to £50,000 during Covid. Yet, its 'efforts to recover fraud losses … have been largely unsuccessful'. As Clifton-Brown noted: relying on 'government-backed lenders' that 'lack any incentive to pursue lost funds' has been 'a dangerously flat-footed approach'.
There are wider inefficiencies, too. The department was set up, the PAC says, 'to provide a 'front door' to all businesses'. Yet, 'officials do not consistently record their interactions with industry'. And, despite spending £791 million in 2023-24 on 'business support grants' and £530 million on 'business support programmes', the department 'found it difficult to readily provide the National Audit Office with a breakdown of its industry support', such as by sector.
In fact, it says something for the department's failings that the PAC feels the need to spell out that 'good oversight of spending enables good decision-making, prioritisation and accountability'. Naturally the department blames the Tories for the issues raised by the PAC and says it has accelerated postmasters' compo, with 'more than £1 billion having now been paid'. Yet, it still seems in a bit of a mess. Lucky, it's only the key to our growth strategy.
• Covid fraud convictions at risk over investigators' legal failure
Two puzzlers from Kantar's supermarket shopping stats for the four weeks to June 15. Are we all bored stupid? And are our appetites being changed by weight-loss drugs?
Grocery footfall 'hit a five-year high', with Brits making 490 million trips to the supermarket, or almost 17 per household. Haven't we got anything better to do? Sales rose 4.1 per cent year-on-year, despite grocery inflation of 4.7 per cent, but spend per trip fell by 3p to £23.89. Surely, that's not because we're eking things out for the next trip, with the likes of Tesco and Sainsbury's now regarded as some sort of entertainment venue? Or is there some other explanation?
Then, volumes fell by 0.4 per cent, the first year-on-year drop of 2025. The reason? Well, Kantar's Fraser McKevitt reckons 'a small part' could 'be down to changing health priorities', thanks to use of the weight-loss jabs developed by Novo Nordisk and Eli Lilly. He says 'four in a hundred' UK households now include 'at least one GLP-1 user' and the drugs have the potential to 'steer choices at the till'.
He may be on to something but his proof looks skinny: 'Four in five of the users we surveyed say they plan to eat fewer chocolates and crisps and nearly three quarters intend to cut back on biscuits.' Yet, don't people always say that sort of thing to researchers and then fail to live up to their plans? The drugs wouldn't exist if they didn't.
One place Donald Trump isn't claiming a ceasefire: his battle with the Fed chairman Jay Powell, who the US president has just branded 'very dumb' and 'hard-headed'. Why? For telling the US House committee on financial services that owing to his tariffs' 'inflationary effects', the Fed was in no rush to cut interest rates from 4.25 per cent to 4.5 per cent, despite two Trump-appointed ratesetters hinting that they favoured a cut as early as next month. Powell's right to be cautious. Despite the pressure, he must stick to his guns.