LONDON - The independent public spending watchdog reported on Thursday that fraud has cost the British government tens of billions of pounds in recent years, with most public bodies unable to comprehend the scope of the issue.

According to the National Audit Office (NAO), government records indicate fraud totaling 21 billion pounds ($25.87 billion) occurred in the 2020–2021 and 202–2022 fiscal years, up from 5.5 billion pounds the previous two years.

7.3 billion pounds of that were associated with short-term COVID-19 schemes, the majority of which were loans to businesses.

The NAO warned that the true cost of fraud could be much higher, citing data from the Public Sector Fraud Authority that put the cost of fraud and error in the public sector at between 33.2 billion and 58.8 billion pounds for the 2020–21 fiscal year alone, excluding pandemic-related expenses.

According to the NAO, the majority of government agencies struggle to detect fraud or even comprehend how serious the risk is.

The level of fraud reported in the annual reports and accounts we audit has significantly increased, according to NAO head Gareth Davies.

"Along with the risk of taxpayer money being lost, it also increases the likelihood that fraud and corruption in all facets of government will be accepted as the norm. This could have an impact on the public's trust in the honesty of public services if it is not addressed."

Transparency International attributed the sharp decline in Britain's ranking in its Corruption Perceptions Index last year to "recent decline in standards in government and controls over the use of taxpayer money"

During the height of the pandemic, it emphasized the government's "VIP lane" for expediting contracts for personal protective equipment, which it claimed systematically favored businesses with ties to the ruling Conservative Party.

On Wednesday, Jeremy Hunt, the minister of finance, stated that the government's top priorities were to combat both tax and state benefit fraud.

The report, according to the deputy leader of the opposition Labour Party, Angela Rayner, "dereliction of duty"

She claimed that because "This government have completely abdicated their responsibility to crackdown on this criminality, leaving public bodies without the resources to combat it effectively and protect the public's money,"