Lessons from Greensill Capital

Public Accounts Committee Closed Inquiry
Opened: 5 Jul 2021 Closed: 21 Jan 2022 Parliament page
In response to the COVID-19 pandemic the government launched a series of schemes providing financial support to businesses of all sizes. Of these, the Coronavirus Large Business Interruption Loan Scheme (CLBILS) provided support to the largest businesses—those with a minimum turnover of £45 million. Commercial lenders (for example, banks, building … Read more
9 Recommendations
19 Conclusions
1 Report
2 Oral sessions
4 Letters
2 Events
Activity timeline 8 events
9 Mar
2022
Correspondence
21 Jan
2022
Report published
18 Jan
2022
Correspondence
20 Nov
2021
Report published
16 Nov
2021
Correspondence
22 Jul
2021
Oral evidence
6 Jul
2021
Correspondence
13 May
2021
Oral evidence
Oral evidence sessions 2 sessions
22 Jul 2021
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Lessons from Greensill Capital
Catherine Lewis La Torre · British Business Bank Charles Roxburgh · HM Treasury Patrick Magee · British Business Bank Sarah Munby · Department for Business, Energy and Industrial Strategy Sir Tom Scholar · HM Treasury
13 May 2021
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Lessons from Greensill Capital
Rt Hon David Cameron
Title HC No. Published Items Response
Twenty-Sixth Report - Lessons from Greensill Capital: accreditat… HC 169 20 Nov 2021 28 Responded
Recommendations & Conclusions
28 results
2 Recommendation Not Addressed
Twenty-Sixth Report - Lessons from…
The Department and the Bank struck the wrong balance between making decisions quickly and protecting...
The Department and the Bank struck the wrong balance between making decisions quickly and protecting taxpayer interests. We have previously found that the need to work at speed in responding to the pandemic has in some instances resulted in increased … Read more
Government Response
The government agrees with the conclusion but the response focuses on the Department's existing value for money assessment processes and commitment to improve future reporting transparency, rather than the Bank outlining its plan for balancing speed and value as requested.
HM Treasury
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3 Recommendation Not Addressed
Twenty-Sixth Report - Lessons from…
The Bank’s approach to due diligence in accrediting Greensill was woefully inadequate.
The Bank’s approach to due diligence in accrediting Greensill was woefully inadequate. The Bank took comfort in Greensill having raised significant funding from global investors and its activities in managing billions of pounds in lending. In doing so, the Bank … Read more
Government Response
The government's response discusses general supplier performance management, cost assurance, and risk apportionment in contracts, with a commitment to write to the Committee on these topics by May 2022, but does not address the specific recommendation for the Bank to review its accreditation process for non-bank lenders by February 2022.
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4 Recommendation Not Addressed
Twenty-Sixth Report - Lessons from…
The Bank has been insufficiently curious when identifying where money lent through the schemes, including...
The Bank has been insufficiently curious when identifying where money lent through the schemes, including by Greensill, has ultimately gone. Companies have borrowed around £30 billion under CBILS and CLBILS. The schemes’ rules require these funds be used to support … Read more
Government Response
The government's response discusses cost savings and project delivery within the Ministry of Defence, entirely failing to address the recommendation regarding the Bank's monitoring of funds lent under COVID-19 business support schemes.
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5 Recommendation Accepted
Twenty-Sixth Report - Lessons from…
We are concerned that the Bank’s investigation into Greensill has progressed much more slowly than...
We are concerned that the Bank’s investigation into Greensill has progressed much more slowly than we would expect given the seriousness of the potential breach. The Bank launched an investigation into Greensill on 12 October 2020, 10 days after discovering … Read more
Government Response
The government agrees with the recommendation, stating the Bank has already informed the Committee of the expected completion timeframe (early months of 2022) for its Greensill investigation and will inform them again upon conclusion.
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6 Recommendation Not Addressed
Twenty-Sixth Report - Lessons from…
The Department’s enquiries of the Bank during Greensill’s accreditation created a damaging perception of interference,...
The Department’s enquiries of the Bank during Greensill’s accreditation created a damaging perception of interference, though the Bank asserts that this did not affect its judgement. The Department had eight email exchanges with the Bank between April and September 2020 … Read more
Government Response
The government's response discusses defence funding, the Integrated Review, and the formation of the UK Health Security Agency, entirely failing to address the recommendation on establishing principles for correspondence with the Bank or cross-government principles for arms-length bodies.
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7 Recommendation Accepted
Twenty-Sixth Report - Lessons from…
Government has not yet identified the lessons it will take from its accreditation of Greensill...
Government has not yet identified the lessons it will take from its accreditation of Greensill or from its COVID-19 business support schemes. Our work over the last 18 months has shown that the scale and nature of the COVID-19 pandemic … Read more
Government Response
The government agrees with the recommendation, committing to a multi-year evaluation of the COVID-19 loan schemes and aiming to publish a lessons-learned report by Summer 2022, with further evaluation reports released annually until 2024.
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1 Conclusion Acknowledged
Twenty-Sixth Report - Lessons from…
On the basis of a report by the Comptroller and Auditor General, we took evidence...
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury (the Treasury), the Department for Business, Energy & Industrial Strategy (the Department), and the British Business Bank (the Bank) about the involvement … Read more
Government Response
The government provides a detailed overview of the COVID-19 business support schemes and Greensill's involvement, acknowledging the context for the Committee's report.
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8 Conclusion Not Addressed
Twenty-Sixth Report - Lessons from…
The Bank accredited Greensill to lend under both CBILS and CLBILS.
The Bank accredited Greensill to lend under both CBILS and CLBILS. As Greensill was not PRA regulated nor did it have a pre-existing relationship with the Bank, it was initially 6 Qq 17, 19; C&AG’s Report para 2, 2.4 7 … Read more
Government Response
The government response consists of boilerplate text listing relevant reports and does not engage with the committee's conclusion regarding the Bank's accreditation of Greensill or its due diligence process.
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9 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
We asked the Bank how much weight it had placed on the work of others,...
We asked the Bank how much weight it had placed on the work of others, such as Greensill’s auditors, Saffery Champness, in its decision to accredit Greensill. The Bank told us that the auditor’s opinion about the financial health of … Read more
Government Response
The government states the Bank will write to the Committee by end of February 2022, detailing accreditation processes reviewed and adjusted for the Recovery Loan Scheme, and will continue to keep these processes under review for future programmes.
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10 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
We asked the Bank why it had accredited Greensill despite several press reports highlighting it...
We asked the Bank why it had accredited Greensill despite several press reports highlighting it had a string of its clients default on their debt, potentially damaging Greensill. The Bank told us that it discussed the losses with Greensill and … Read more
Government Response
The government states the Bank will write to the Committee by end of February 2022, detailing accreditation processes reviewed and adjusted prior to the launch of the Recovery Loan Scheme, and will continue to keep its accreditation process under review for future programmes.
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11 Conclusion Acknowledged
Twenty-Sixth Report - Lessons from…
The NAO found that the Bank treated Greensill’s application like other similar applicants, but that...
The NAO found that the Bank treated Greensill’s application like other similar applicants, but that the Department was particularly interested in Greensill’s accreditation. The Bank applied the same accreditation and due diligence process to Greensill as it did to the … Read more
Government Response
The government acknowledges the committee's point and is updating the Shareholder Relationship Framework Document, as part of which it will consider changes regarding operational independence and departmental correspondence with the Bank. It will inform the Committee of the outcome of its considerations.
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12 Conclusion Acknowledged
Twenty-Sixth Report - Lessons from…
The Department told us that it had requested updates on when a decision would be...
The Department told us that it had requested updates on when a decision would be made about accrediting Greensill so that it could decide whether it needed to create a “separate bespoke solution … [if] the process was ultimately going … Read more
Government Response
The government acknowledges the committee's point and is updating the Shareholder Relationship Framework Document, as part of which it will consider changes regarding operational independence and departmental correspondence with the Bank. It will inform the Committee of the outcome of its considerations.
HM Treasury
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13 Conclusion Deferred
Twenty-Sixth Report - Lessons from…
The NAO found that, when challenged on its loans to borrowers within the GFG Alliance...
The NAO found that, when challenged on its loans to borrowers within the GFG Alliance group, Greensill told the Bank that it had received “political steers” that its support for the steel industry was welcomed.34 We asked the Department what … Read more
Government Response
The government states its Shareholder Relationship Framework Document is being updated, and consideration will be given to changes regarding operational independence for 'Service Arm' activities, with a commitment to write to the Committee on the outcome.
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14 Conclusion Deferred
Twenty-Sixth Report - Lessons from…
We asked the Bank whether it considered the Department’s questions about Greensill’s accreditation as the...
We asked the Bank whether it considered the Department’s questions about Greensill’s accreditation as the Department encouraging the approval of Greensill’s application. The Bank told us that it had considered the level of interest from the Department as “unusual”, but … Read more
Government Response
The government states that its Shareholder Relationship Framework Document is being updated, and consideration will be given to changes regarding operational independence for 'Service Arm' activities, with a commitment to write to the Committee on the outcome.
HM Treasury
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15 Recommendation Accepted
Twenty-Sixth Report - Lessons from…
In early 2020, Greensill approached a number of government departments seeking involvement in various business...
In early 2020, Greensill approached a number of government departments seeking involvement in various business support schemes.41 Greensill approached the Treasury and the Bank of England to access the Covid Corporate Finance Facility (CCFF) and was rejected as it was … Read more
Government Response
The government agrees with the recommendation, stating BEIS has already raised the importance of cross-government information sharing and will work with Cabinet Office and HM Treasury to develop existing processes where necessary.
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16 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
We were concerned that Greensill had approached various parts of government looking for financial support,...
We were concerned that Greensill had approached various parts of government looking for financial support, with different decision-makers arriving at conclusions in isolation and without engaging with officials in other departments. For example, the Bank told us that it was … Read more
Government Response
The government agrees and states the recommendation is implemented. BEIS will work closely with Cabinet Office and HM Treasury to develop existing processes for sharing company information across government departments and public bodies, while respecting commercial and legal restrictions.
HM Treasury
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17 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
In May 2020, the Bank of England shared information with the Treasury that it had...
In May 2020, the Bank of England shared information with the Treasury that it had raised concerns with the National Crime Agency about Wyelands Bank. Wyelands Bank is a part of the GFG Alliance which was a significant Greensill client.48 … Read more
Government Response
The government acknowledges the importance of information sharing, stating that BEIS has written to the Committee, currently facilitates data sharing, and will work closely with Cabinet Office and HM Treasury to develop existing processes where necessary.
HM Treasury
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18 Conclusion Acknowledged
Twenty-Sixth Report - Lessons from…
Greensill lent a total of £418.5 million under the government’s COVID-19 business support schemes between...
Greensill lent a total of £418.5 million under the government’s COVID-19 business support schemes between July and October 2020. Of this, Greensill lent £400 million under CLBILS, the maximum amount it was authorised to lend, through eight loans of £50 … Read more
Government Response
The government acknowledges the committee's finding by reiterating the total amounts Greensill lent under CLBILS and CBILS.
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19 Conclusion Acknowledged
Twenty-Sixth Report - Lessons from…
On 12 October 2020, the Bank launched an investigation into Greensill’s compliance with the CLBILS...
On 12 October 2020, the Bank launched an investigation into Greensill’s compliance with the CLBILS scheme rules. This was 10 days after the Bank first noticed that Greensill had made six CLBILS loans on 30 September to companies associated with … Read more
Government Response
The government confirms that the Bank launched an investigation in October 2020 into Greensill's compliance with CLBILS rules due to concerns over £350 million lent to GFG Alliance companies, which appeared to contravene the £50 million group lending cap.
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20 Conclusion Acknowledged
Twenty-Sixth Report - Lessons from…
The Bank told us that it had acted immediately to protect the taxpayers’ position by...
The Bank told us that it had acted immediately to protect the taxpayers’ position by preventing Greensill from making any further loans under the schemes.56 The Bank engaged Ernst & Young (EY) between October 2020 and March 2021 to examine … Read more
Government Response
The government acknowledges the Bank's actions, stating the loan guarantees remain suspended during the ongoing investigation and outlining the potential maximum liability if the guarantee is reinstated.
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21 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
In the Letter of Concern, the Bank outlined what it considered to be breaches of...
In the Letter of Concern, the Bank outlined what it considered to be breaches of the guarantee agreement. In the Letter, the Bank also suspended the guarantee while the investigation was ongoing and invited representations from Greensill.59 We asked the … Read more
Government Response
The government states the Bank has written to the Committee on 17 December 2021 and will inform them when its investigation into Greensill's lending concludes, expected in early 2022, prioritizing a thorough and informed decision.
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22 Recommendation Accepted
Twenty-Sixth Report - Lessons from…
The Bank confirmed that the investigation was still ongoing as it was awaiting a formal...
The Bank confirmed that the investigation was still ongoing as it was awaiting a formal response from Greensill’s joint administrators. The Bank explained that it had agreed to extend the deadline for Greensill’s response to August 2021 because it wanted … Read more
Government Response
The government agrees with the recommendation, confirming the Bank's investigation into Greensill's lending prioritises thoroughness over speed, and expects to inform the Committee of the outcome in the early months of 2022.
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23 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
In total, under CBILS and CLBILS, lenders have issued more than 110,000 loans worth around...
In total, under CBILS and CLBILS, lenders have issued more than 110,000 loans worth around £30 billion.68 Part of the eligibility criteria for receiving a loan included borrowers having its business activity based in the UK.69 The Treasury, which was … Read more
Government Response
The government states that existing scheme rules, lender processes, and the Bank's audit assurance programme, including testing UK eligibility criteria, are in place to ensure loans support UK businesses, with measures available for non-compliance.
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24 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
To understand how the Bank ensures that these schemes support UK businesses, we asked about...
To understand how the Bank ensures that these schemes support UK businesses, we asked about the barriers that were in place for preventing the offshoring of the taxpayer- guaranteed loans. The Bank responded that a requirement of the scheme was … Read more
Government Response
The government agrees and states the recommendation is implemented, explaining that existing scheme rules require loans to benefit UK operations and the British Business Bank's audit programme already tests lenders' compliance with UK eligibility criteria.
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25 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
We asked the Treasury and the Bank whether they had undertaken any analysis of how...
We asked the Treasury and the Bank whether they had undertaken any analysis of how the £350 million loaned to GFG Alliance companies was used, or in which country the money was spent. The Bank told us it was aware … Read more
Government Response
The government states it agrees with 'the recommendation' (though the item is a conclusion) and describes existing scheme rules for CBILS/CLBILS, lender control requirements, and the Bank's audit assurance programme to ensure compliance, implying these processes address concerns about loan usage and eligibility.
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26 Conclusion Accepted
Twenty-Sixth Report - Lessons from…
Our work on the government’s response to the COVID-19 pandemic has demonstrated that there are...
Our work on the government’s response to the COVID-19 pandemic has demonstrated that there are important lessons to be learnt to improve government’s ability to respond to future emergencies and its business-as-usual service delivery. In 2021, as part of our … Read more
Government Response
The government commits to learning lessons from COVID-19 loan schemes through a multi-year evaluation with reports published annually between 2022 and 2024, and aims to produce a lessons-learned report by Summer 2022.
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27 Conclusion Not Addressed
Twenty-Sixth Report - Lessons from…
We asked what lessons had been learnt or what could have been done differently as...
We asked what lessons had been learnt or what could have been done differently as a result of Greensill’s access to these taxpayer-backed schemes. The Treasury told us that it wanted to review all the reports and inquiries, such as … Read more
Government Response
The government's response states it agrees with 'the recommendation' and commits to a multi-year evaluation of COVID-19 loan schemes and publishing a lessons-learned report by Summer 2022, but this does not directly address the committee's conclusion outlining what the Treasury had *said* about reviewing reports.
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28 Recommendation Accepted
Twenty-Sixth Report - Lessons from…
The Bank told us that it will closely evaluate its COVID-19 business support schemes, including...
The Bank told us that it will closely evaluate its COVID-19 business support schemes, including assessing whether there were things it would need “to do differently” with the accreditation processes going forward and more specifically whether there could have been … Read more
Government Response
The government agrees with the recommendation to evaluate the COVID-19 loan schemes, confirming a multi-year evaluation is underway with reports due between 2022-2024, and commits to producing an interim lessons-learned report by Summer 2022.
HM Treasury
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Government Response AI assessment · 28 of 9 classified
Accepted 14
Acknowledged 6
Deferred 2
Not Addressed 6
Total 9 recs + 19 conclusions
Correspondence 4 letters
9 Mar 2022 Correspondence from Catherine Lewis La Torre, Chief Executive, British Business Bank, re British Business Bank (the Bank) review, dated 2 March 2022
Parliament page
18 Jan 2022 Correspondence from Sarah Munby, Permanent Secretary, Department for Business, Energy & Industrial Strategy, re PAC recommendations – “Lessons from Greensill Capital”, dated 13 January 2022
Parliament page
16 Nov 2021 Correspondence Catherine Little, Director General, Public Spending Head of Government Finance Function, re Lessons from Greensill Capital, dated 7 September 2021
Parliament page
6 Jul 2021 Correspondence from RT David Cameron, Former prime minister of the United Kingdom, re follow up to Greensill, dated 25 June 2021
Parliament page