Rachel Reeves is to appoint a health service and regulatory veteran, Tom Hayhoe, a former Conservative cabinet adviser, as her Covid corruption commissioner with the remit of clawing back billions in fraudulent contracts.
The chancellor is understood to believe the Treasury can recoup £2.6bn from waste, fraud and flawed contracts signed during the pandemic.
The Treasury has previously said the commissioner will work with HMRC, the Serious Fraud Office and the National Crime Agency to examine an estimated £7.6bn worth of Covid-related fraud.
The Guardian understands Hayhoe will begin work on Tuesday initially reviewing £674m in contracts that had been previously written off by the Conservative government, with the aim of returning cash to the taxpayer.
Hayhoe, who began his career as an adviser to the Tory cabinet minister Peter Walker under Margaret Thatcher, has had a prolific career in healthcare, procurement and scrutiny.
He will also receive assessments of fraud recovery work to date in other major Covid loan schemes such as furlough, bounce-back loans, business support grants, eat out to help out, and Covid-era universal credit fraud.
The award of lucrative Covid contracts was a significant controversy of the previous government. The Conservative peer Michelle Mone was involved in one contract with PPE Medpro, awarded contracts worth £200m. The company is the subject of a long-running investigation by the National Crime Agency.
Annual accounts for the DHSC in January showed that nearly three-quarters of the money it spent on PPE during the pandemic had been written off.
A Treasury source said: “The chancellor has been clear that she wants this money – that belongs to the British people, and belongs in our public services like our NHS, schools, and police – back. She won’t let fraudsters who sought to profit off the back of a national emergency line their pockets.
“Tom Hayhoe brings a wealth of experience and will leave no stone unturned as a commissioner with free rein to investigate the unacceptable carnival of waste and fraud during the pandemic.”
Labour pledged in its manifesto to appoint a fixed-term commissioner to recoup public money lost in pandemic-related fraud and from contracts that have not been delivered. Hayhoe will be in post on a one-year contract, reporting to the chancellor.
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He will then deliver a report to parliament, which will include recommendations for government procurement in the face of future crises.
Hayhoe was chair of west London NHS Trust and of West Middlesex university hospital, as well as investigating committee chair on the Nursing and Midwifery Council’s fitness to practise panel.
He has also held senior positions at WH Smith and McKinsey and is chair of the Legal Services Consumer Panel. He has also chaired the Taxation Disciplinary Board, been an external assessor at the College of Policing, and a disciplinary committee chair for the Association of Chartered Certified Accountants.
Reeves is expected to confirm the appointment at Treasury questions in the House of Commons on Tuesday, the Guardian understands.
The previous government has always defended the Covid spend, citing the unique circumstances during a pandemic when globally PPE was in extremely short supply, which drove up costs and led to a rush to secure protective equipment for frontline health and care workers.