Hostile states along with organized crime and terror linked groups obtained GBP 28 billion in public money via government loans and aid, according to an investigation by The Telegraph.

The findings exposed a confidential government dossier that showed billions of pounds flowed to criminal networks between 2015 and 2021.

The information highlighted extensive misuse of public resources through foreign aid and COVID relief loans, including millions directed to Russia and the Islamic State. More than GBP 28 billion reached hostile actors inside Britain during that period.

The dossier was prepared for the UK Cabinet Office yet suppressed by the prior administration to prevent political fallout, The Telegraph reported.

The newspaper verified the document, describing it as the first review to trace how public money reached national security risks.

The records covered grants to Russia connected firms, COVID loans issued to ISIS members, and research investments tied to Chinese military interests.

British Public Money Flows to ISIS China and Russia

Dr Rebecca Harding, CEO of the Center for Economic Security, described the dossier as an urgent alert to The Telegraph.

Economic warfare and security now rank as top priorities because threats from state and non state actors move through commercial channels, she noted. Officials had assumed shared goals with other nations but overlooked efforts to undermine British economic strength through such power plays.

Additional cases showed COVID relief grants reaching ISIS in Syria while UK counter terrorism funds landed with anti Western extremists.

Other sums supported criminal gangs and human traffickers who claimed housing benefits and disability payments.

Officials observed strong ties between these gangs and nations opposed to Britain, including one Eastern European crime network that aggressively pursued British public resources to promote illegal immigration with backing from a hostile state.

Portions of the funds also financed terror and domestic risks inside the UK.

The review was requested by UK officials in 2023 for distribution among senior figures after fraud was uncovered in COVID relief programs.

Officials Warn UK Public Funds Act as ATM for Terrorists Without Proper Oversight

Cabinet Office results pointed to broad flaws in grant procedures, prompting officials to withhold the report.

Tom Keatinge, founding director of the Center for Finance and Security at RUSI, told The Telegraph that Britain traditionally maintained clear boundaries between government and industry yet now requires greater caution in funding decisions amid current threats, consistent with repeated security service guidance.

Keatinge noted numerous instances of benefits and grants serving as an ATM for terrorists while acknowledging that distributing agencies have grown more aware of the dangers.

Professor Nicholas Ryder, former adviser to the Home Affairs Select Committee and terrorism financing expert at Cardiff University, called the results staggering and stressed the clear connection between fraud and terrorist financing.

The core UK issue remains that successive governments have not fully linked fraud with terrorist financing at the policy level, he said, creating a national security threat that is recognized but not addressed cohesively.

A Cabinet Office spokesperson stated the government is pursuing new measures against fraud and has already recovered over GBP 7.5 billion in taxpayer funds last year through enhanced prevention and data driven investigations.