The UK Government has handed over £28billion of taxpayer cash to terrorists, hostile states and gangsters, reports suggest. A secret dossier detailing the transactions showed billions of pounds going to organised crime groups and millions to Russia and the Islamic State between 2015 and 2021.

The report was compiled by the Cabinet Office but ultimately buried by the previous Government in a bid to avoid humiliation, according to The Telegraph. Revelations included Coronavirus loans sent to Islamic terrorists and grants given to companies linked to the Russian state, the newspaper reported. Taxpayer cash was also allegedly handed to anti-Western extremists, and human traffickers who were claiming disability allowances and housing benefits. Rebecca Harding, of the Centre for Economic Security, said the dossier highlighted the growing threat posed by "adversaries, state actors and non-state actors" through "economic warfare".

"One of the problems is we have assumed that everybody wants the same thing as us," she said. "What we haven't realised is, when it comes to other countries ... [some] want to project their economic power in a way that undermines our economic power."

Professor Nicholas Ryder, a former adviser to the Home Affairs Select Committee, also described it as "staggering", adding that "the link between fraud and terrorist financing is very clear".

The report was said to have been ordered by the Conservative Government in 2023 after it emerged that rescue packages during the pandemic had been subject to widespread fraud.

But the findings, which shed highly unfavourable light on due diligence practices, were so damaging that officials reportedly decided to hush them up.

It comes after an independent analysis in December 2025 found that taxpayers lost £10.9billion to fraud and error as part of the pandemic response.

The Covid Counter Fraud Commissioner, Tom Hayhoe's, final report to Parliament found that schemes, including Bounce Back Loans and Eat Out to Help Out, were rolled out with significant fraud risks and without early safeguards, costing the taxpayer millions.

He identified weak accountability, bad quality data and poor contracting as the primary causes of the losses.

The Labour Government actioned many of the Commissioner's early proposals, including tougher sanctions and specialist fraud recovery teams to track down suspected fraudsters and recover taxpayer cash.

Britain also had one of the highest aid budgets in the world when the report was compiled, with a commitment to spend 0.7% of gross national income on foreign aid. The Conservatives cut the amount to 0.5% in 2021, citing the economic blow of the pandemic, but Labour has pledged to restore it to 0.7%.

A spokesperson for the Cabinet Office said: "This Government is taking unprecedented action to tackle public sector fraud, having saved over £7.5bn of taxpayer money in the past year through aggressive fraud prevention and recovery.

"By using better data and hiring more expert investigators, we are now finding and stopping this fraud faster than ever before."