Leaked Report Claims £28bn of UK Taxpayer Cash Ended Up Benefiting ISIS, Russia and Terror Networks

A leaked government dossier claims that more than £28bn of UK taxpayer money was misappropriated between 2015 and 2021 and ultimately reached criminals, hostile states, and terror-linked networks, including ISIS and Russia-linked interests, according to The Telegraph.

The document, described as a secret Cabinet Office assessment, alleges that foreign aid spending and Covid-era loan schemes were exploited on a scale previously not publicly acknowledged.

The claims, which have not been independently verified in full detail, have emerged from what is said to be an internal government report commissioned in 2023 following concerns about widespread fraud during pandemic support programmes. Officials reportedly concluded the findings were too politically sensitive to publish, a decision now fuelling questions over how taxpayer funds are monitored once they leave central control.

How Billions in Aid Handed to Terrorists and Criminals

The report looks at a time when the UK was spending large amounts on foreign aid, including a policy that aimed to spend 0.7% of national income on overseas support.

Official figures show aid spending rose from £12.1bn in 2015 to £15.2bn in 2019. It then dropped to £14.5bn in 2020 and £11.4bn in 2021 during the pandemic.

The leaked report claims that within this system, some money was misused because of weak checks and fraudulent applications. It says funds from COVID loans, aid payments, and other government grants were exploited. According to the report, some of this money ended up with criminal groups, hostile states, and terrorist organisations, including ISIS.

It also makes more specific claims, including that some grants were linked to Russian state interests, that Covid loans may have reached ISIS-linked individuals in Syria, and that some investments were connected to organisations tied to the Chinese military. However, these claims have not been publicly proven, and no independent review has confirmed the £28bn figure.

The report also suggests there may have been links between organised crime groups and state-backed networks, possibly working together to exploit UK public money. But these claims have not been verified publicly, and the government has not released detailed intelligence to support them.

Questions Over Covid Loan Schemes

Much of the attention focuses on the Covid Bounce Back Loan Scheme, which was set up to help small and medium-sized businesses survive the pandemic. Businesses could borrow between £2,000 and £50,000, and the money was given out quickly with very few checks, so support could reach firms as fast as possible.

While this helped many companies stay afloat, it also created opportunities for fraud. A report to Parliament in December estimated that £10.9bn was lost through fraud and mistakes across Covid support schemes. Some of this money has since been recovered, and several people have been taken to court over the misuse of the loans.

One case involved a barber shop owner who was jailed in 2023 after sending Covid loan money to ISIS-linked individuals in Syria. However, this is a single prosecuted case and does not prove the much larger £28bn figure now being discussed.

Experts say the main problem was the speed of the scheme. Because the loans were issued so quickly and with limited checks, it created gaps that both criminals and organised groups were able to exploit. The UK's Covid counter-fraud commissioner, Tom Hayhoe, has also said that weak oversight and poor-quality data played a major role in the losses seen during the pandemic response.

Where is Security And Oversight?

Security experts quoted in The Telegraph's report say fraud and national security risks are now closely linked, especially when state or criminal groups use financial systems to gain access to public money. Tom Keatinge from the Royal United Services Institute said fraud is not being fully considered as part of national security planning, calling it a growing blind spot in government policy.

Other specialists say that while fraud in large emergency spending programmes is well documented, it is much harder to prove exactly how much money ends up with terrorist groups or hostile states. They say this is because some assessments rely on intelligence that is not made public.

The Cabinet Office has not confirmed the £28bn figure. Instead, it points to more recent anti-fraud measures and says more than £7.5bn has been saved through better checks and recovery efforts. Officials also say new laws, including the National Security Investment Act, are meant to reduce similar risks in the future.

Even so, the leaked report has increased pressure on the government to explain how public money was monitored during a period of very fast spending.