The Department was aware of heightened fraud risks within its COVID-19 business support schemes from the outset but did not make full use of all the tools at its disposal to prevent and detect fraud. The Department expected that some potential recipients of funding for its COVID-19 business support schemes would attempt to defraud the exchequer. It sought ministerial directions on these schemes highlighting some of the risks posed by fraud, but did not attempt to quantify the potential fraud exposure. These requests for ministerial directions also did not sufficiently identify or reflect the potential risks from organised economic crime. The number of new companies being registered in 2020–21 rose by more than 20% compared to any of the previous five years. Although the Department indicated that disruption can also present opportunity, we feel around 170,000 new companies would certainly appear to be a warning sign warranting closer scrutiny. However, the Department could not tell us whether it sought or received information from Companies House on company formation trends, and so this is unlikely to have featured in the Department’s understanding of evolving fraud risks. Each new company could potentially apply for COVID-19 business support. Lord Agnew suggested more than 1,000 companies received emergency business support despite not trading at the start of the pandemic, referring to this as a “schoolboy error”. Recommendation: The Department should ensure that the expected scale and sources of fraud risk should be clearly communicated to ministers when ministerial directions are sought, including mitigating actions such as, for example, how the Department and Companies House would work together sharing information to prevent fraud. The Department should, as part of its Treasury Minute response, clearly explain how it is planning to recover funds it identifies as claimed fraudulently or paid out in error.