Council posed as police during Covid fraud crackdown

An organisation that presented itself as a leading authority for tackling Covid loan fraud was in truth a council office in Essex with no right to claim it had policing powers, The Times can reveal.

The National Investigation Service (Natis) was given £30 million by government to play a central role in tackling abuse of the £47 billion bounce back loan scheme. It was given a police.uk web domain and staff received police.uk email addresses, normally reserved for staff at police forces.

On its website Natis investigators were said to have been involved in “raids”, to have “arrested” people, “searched” properties and “seized” items.

However, Natis staff have no police powers. It is a department within Thurrock council in Essex that is staffed by council officers.

The College of Policing, which administers the police.uk domain on behalf of police forces, told The Times it had asked the council to explain how it came to be using the web address. Thurrock removed Natis from the police website this year and the service now has a page on the council site.

The unit has recouped far less than the £30 million taxpayers invested, with successful seizures so far of £17 million.

Bankrupt council and bounce back pressure

Thurrock council was effectively bankrupt in December 2022 after a series of disastrous investments, including one where its own counterfraud measures appear to have failed.

It is suing one of its former business partners, Liam Kavanagh and his company Rockfire Capital, for fraud after it lost about £200 million it invested in an alleged solar farm scam.

Kavanagh has denied fraud, saying all the payments were legal and approved by the company’s finance team and auditor. He is disputing the council’s fraud claim.

The revelations will raise further questions about how seriously Rishi Sunak’s government
has taken recouping taxpayer money lost to abuses of pandemic finance programmes.

Natis was set up under a different name in 2014 as a counterfraud service for Essex. It became a national organisation in 2018 and shifted focus to Covid fraud in 2020.

The government frequently cited the work of Natis while under pressure to do more to tackle widespread error and fraud in the bounce back scheme, under which 1.2 million loans were issued. More than one in four has defaulted or is in arrears. The government told the public accounts committee that Natis had made scores of “arrests”.

‘This would be comical if billions hadn’t been stolen’

Mike Craig, who runs Mr Bounce Back, a website cataloguing issues with Covid loans, said: “We were given the impression that Natis had police powers. It turns out it’s an office in a council in Essex whose own record on counterfraud is so bad that it was effectively bankrupted.”

Craig’s website first reported responses to freedom of information requests related to the issue.

David Clarke, a former head of fraud at the City of London Police, who has called for government to take Covid fraud more seriously, said: “This would be comical if so many billions of pounds had not been stolen.”

A spokesman for Thurrock council said the service “worked with police forces” and “has been involved in investigations” that led to 81 arrests.

He said Natis had moved its domain away from the police.uk domain this year to “reflect the position of Natis as a [council] service”. He said the police domain had been used to “allow greater collaboration with law-enforcement agencies”.

A government spokesman said Natis was an “experienced counter fraud agency” and more recoveries were “expected over the coming months”. He did not respond to questions about the presentation of Natis as a policing organisation.