CLAIMS of success by a fraud unit run by Thurrock Council have been found to be significantly overstated.

The team of investigators based within the council, known as the National Investigation Service (Natis) was asked to investigate more than £1 billion of suspected fraud on taxpayer-backed pandemic business loans recovered only £7.2 million, the government has admitted.

Natis received £38.5 million from taxpayers to investigate widespread abuse of the bounce-back loan scheme and had previously claimed that it recovered £23 million.

An investigation by state auditors, however, was only able to verify £7.2 million of recoveries "directly attributed to active investigations by Natis."

That discovery comes five months after the government pulled out of its deal with Natis and moved the investigation recovery operation to the Insolvency Service, a national agency.

The government scrapped the unit at Thurrock Council and in a statement said it has taken 'decisive action to transfer cases to the Insolvency Service – who have a proven track record of effectively tackling fraud - giving taxpayers' money the best possible value.'

The government acted after a series of reports in The Times newspaper exposed its failures to recover taxpayer cash, questions over its governance and accusations that it was wrongly presented as a national policing authority.

Those failures prompted the government to admitted that a review had concluded that "public money was not being spent effectively" by the organisation. At the time it was said that Natis had secured only 14 convictions but had recovered £23 million. That has now been proven to be a false claim.

The Times' latest report highlights the reality of recovered money, as opposed to Thurrock Council's previous claim.

The disclosure by the Government Internal Audit Agency, published last week, said that although its initial investigation "identified significant governance issues" at Natis, there is "no indication of purposeful misrepresentation" and it said: "Natis has been open and transparent."

It said the dramatic adjustment to its recovery record 'reflects a refined assessment of what can be directly attributed to Natis's enforcement efforts'.

The government's 2020 deal with Natis was signed by Sean Clark, Thurrock council's controversial former director of finance.

Clark was the council lead for its failed solar finance deals with Rockfire Capital, one of largest ever alleged local authority frauds. He resigned after the deal collapsed and is currently being investigated, along with others in the council, by the Serious Fraud Office.

In response to the Times' latest investigations, a spokesman for Thurrock Council remained upbeat and told the Times: "Natis has secured convictions against 15 people who defrauded the state of over £2.5 million. There are a number of open, complex high-value fraud investigations which are linked to both individuals and organised crime groups who actively attempt to conceal their involvement. Fraud investigations can be time consuming and resource intensive."

The spokesperson added the service had "146 current cases with a total fraud value of £53 million that it is seeking to recover to the public purse and, of the Natis cases that have concluded following prosecution, Natis has achieved a 100 per cent conviction rate."

The Department for Business and Trade said: "We will always protect taxpayer money, which is why after considering Natis' performance we took the decision not to renew Thurrock council's contract.

"We are currently working with the Insolvency Service, who have a proven track record in handling complex fraud and financial misconduct investigations, and other agencies on the Natis casework, as part of our ongoing work to protect taxpayers' money."

The covid-related work of NATIS was highlighted on Thurrock Nub News in September 2023, when it was revealed that Thurrock Council had been conned out of around £80,000 by unidentified scammers who claimed covid relief money. Little detail has been made available of what followed on from that.

At the time the Deputy Director Head of Crime Operations at the NATIS was Michael Dineen, who currently the council's Assistant Director for Community Protection and Enforcement Services, who takes charge of fraud and other allegations involving the council.