A confidential 2023 Cabinet Office assessment obtained by The Telegraph concludes that more than £28bn of UK public money—including foreign aid and Covid-era loans—was misappropriated to terrorists, hostile states and organised criminals between 2015 and 2021. The dossier cites examples such as grants tied to Russian-linked companies, Covid payments routed to Islamic State, and investments involving firms with Chinese military links. Experts say the findings expose gaps in due diligence and call for stronger cross‑agency coordination to protect national security.
Secret Cabinet Office Dossier: Over £28bn Of UK Public Money Diverted To Terrorists, Hostile States And Organised Crime
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A confidential Cabinet Office assessment obtained by The Telegraph concludes that more than £28 billion of UK public money—including foreign aid, pandemic-era relief and other grants and loans—was misappropriated to terrorists, hostile states and organised criminals between 2015 and 2021.
The dossier, compiled for senior Whitehall officials in 2023 but never published, says the funds were diverted through a range of channels and weak controls. Officials told The Telegraph the document was withheld from public release to avoid the political fallout of revealing the extent of the problem.
Key Findings
The internal review highlights several specific patterns of concern, including:
Islamist militants in Somalia. Terror groups have been the recipients of British taxpayers’ money - Abdirashid Abdulle Abikar/AFP via Getty
- Grants and contracts awarded to companies with links to the Russian state.
- Covid loans and relief payments that were routed to Islamic State operatives and affiliates.
- Public investment in research involving firms with ties to the Chinese military.
- Criminal networks misusing the benefits system and pandemic support, including organised human-trafficking groups.
How The Review Was Compiled
Authors of the report say they reached their estimate by systematically analysing government grants from 2015 to 2021, consulting academics and think tanks, and reviewing open-source reporting on foreign aid fraud. They note the total misappropriated represented a small fraction of overall grant awards, but that the security consequences were significant.
Overlap Between Crime And Hostile States
Sources involved in the inquiry reported indications of overlap between organised crime networks and hostile state actors. The dossier describes a concerted effort by an Eastern European criminal network—allegedly backed by a hostile state—to obtain UK public funds and facilitate illegal migration. Intelligence sensitivities prevented further public detail.
Expert Reactions And Government Response
Rebecca Harding, Centre for Economic Security: “This should be a wake-up call. Economic warfare is growing and adversaries are using commercial channels to undermine national power.”
Other expert commentators said the findings exposed long-standing weaknesses in due diligence, data quality and cross‑government co‑ordination. A separate parliamentary report noted taxpayers lost £10.9bn to fraud and error during the pandemic response; the current government says it has recovered more than £7.5bn in the past year through strengthened prevention and recovery work.
The dossier also points to recent protections: the introduction of the National Security Investment Act and some tightened grant checks since the period covered. However, national security sources told investigators it remains unclear which part of government is responsible for embedding national security considerations into grant decisions.
What Comes Next
Experts urge clearer accountability, better use of data, tighter due diligence on grant recipients, and closer cooperation between financial and security agencies (including HMRC and MI5) to prevent future diversion of public funds to malign actors.
Note: This article summarises findings reported by The Telegraph and the confidential Cabinet Office dossier prepared in 2023.
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