UK Inquiry Tracker

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

Correspondence from Catherine Lewis La Torre, Chief Executive, British Business Bank, re British Business Bank (the Bank) review, dated 2 …

21 Jan
2022

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Twenty Sixth report from Session 2021-22

18 Jan
2022

Correspondence

Correspondence from Sarah Munby, Permanent Secretary, Department for Business, Energy & Industrial Strategy, re PAC recommendations – “Less…

20 Nov
2021

Report published

Twenty-Sixth Report - Lessons from Greensill Capital: accreditation to business support schemes

16 Nov
2021

Correspondence

Correspondence Catherine Little, Director General, Public Spending Head of Government Finance Function, re Lessons from Greensill Capital, …

22 Jul
2021

Oral evidence

Lessons from Greensill Capital

6 Jul
2021

Correspondence

Correspondence from RT David Cameron, Former prime minister of the United Kingdom, re follow up to Greensill, dated 25 June 2021

13 May
2021

Oral evidence

Lessons from Greensill Capital

Oral evidence sessions 2 sessions

22 Jul 2021

View on parliament.uk

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

View on parliament.uk

Lessons from Greensill Capital

Rt Hon David Cameron

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Twenty-Sixth Report - Lessons from Greensill Capital: accreditat…	HC 169	20 Nov 2021	28	Responded

Recommendations & Conclusions

14 results

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 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 Greensill had issued seven CLBILS loans, totalling £350 million, to companies associated with the GFG Alliance. The Bank accepts that it was very surprised by these loans because the scheme rules prohibit lending to groups above £50 million. This is despite press reports in the run up to September 2020 questioning the relationship between Greensill and the GFG Alliance, culminating in the German regulator, BaFin, raising similar concerns. The Bank told us that it had explicitly communicated the group lending rules to Greensill, explaining that the lending limit would be £50 million for the whole group, not per subsidiary.1 In October 2020 the Bank instructed Ernst & Young (EY) to examine all eight of Greensill’s CLBILS loans. This work was completed by March 2021 with the Bank provisionally concluding that Greensill was in breach of the scheme rules. The Bank informed Greensill of its provisional findings and that it was suspending the government guarantee for these loans on 2 March 2021, five months after the loans were made. While the Bank initially acted quickly when it suspected Greensill had breached the scheme rules, the investigation is still ongoing, over a year later. The Department and the Bank assert that there is no real benefit in rushing this process in order to ensure they could not be challenged on any of the steps that were taken. Until this investigation concludes, uncertainty over the risk to taxpayer’s money remains, with the ultimate decision on whether Greensill breached the rules likely to be made in the courts. Recommendation: The Bank should complete its investigation as soon as possible and inform the Committee, as a matter of urgency, when it expects to do so. It should write to the Com Show less

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.

HM Treasury

View details

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 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 and the government response are unprecedented in recent history and there is much that government can learn to improve both its ability to respond to emergencies and its business-as-usual service delivery. The Bank’s accreditation of Greensill has highlighted wider lessons about Government’s response to the pandemic, including the need to balance delivering at speed with managing risk, which we have previously reported on. The Bank intends to evaluate its COVID-19 business support schemes to determine whether there are lessons it can learn. It accepts that discussions with international counterparts that have been delivering similar schemes, such as development banks, would be a fruitful theme. The Treasury and the Department similarly intend to review the results of the various inquiries on Greensill’s interaction with Government before drawing any conclusions. However, Government is yet to set out its plans for identifying and applying the lessons in order Lessons from Greensill Capital: accreditation to business support schemes 9 to prevent another situation like Greensill from occurring and improve its ability to respond to future emergencies and economic shocks. We are concerned that if Government does not swiftly formalise this lessons-learned exercise, or conduct it soon enough, it risks losing institutional memory and the necessary lessons will not be learned. Recommendation: The Treasury, the Department and the Bank should jointly work to identify the lessons that need to be learned from its COVID-19 business support schemes and Greensill’s accreditation in particular. By July 2022 they should publish a full lessons-learned report on these schemes, outlining how each lesson will be implemented. This will enable it to be bette Show less

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.

HM Treasury

View details

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.

HM Treasury

View details

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 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 their potential impact on its financial position, which had provided “what appeared to be a plausible answer”.22 It explained that other lenders had also taken similar losses on the same 14 C&AG’s Report, paras 11, 1.13, 2.15 15 Q 33 16 Q 33 17 Qq 93–94 18 Qq 95, 121–122 19 Q 95 20 Q 39 21 Letter from the Chief Executive of the British Business Bank to the Chair, 7 September 2021 22 Q 88 Lessons from Greensill Capital: accreditation to business support schemes 13 company, so it did not feel like a Greensill-specific issue. The Bank further explained that these defaults related to problems with the underlying borrowers rather than a systemic issue with Greensill making wrong lending decisions.23 We also questioned the Bank on the risks that the German Regulator, BaFin, raised regarding Greensill’s exposure to companies within the GFG Alliance—a concern that was also raised in several press reports prior to September 2020.24 The Bank told us that the Treasury had made it aware that there were growing regulatory concerns by November or December 2020, but this was “perhaps a little late” as Greensill had made its CLBILS loans by the end of September 2020.25 The Bank also confirmed that it had been unaware that Greensill’s insurance provider, Tokio Marine, were investigating Greensill.26 We asked the Bank whether looking back with hindsight, it would have done anything differently. The Bank told us it did not think that it had missed anything based on the information available at the time Greensill was accredited, while acknowledging that “with more time and a different process” it might have uncovered something different.27 The Department’s interest in Greensill’s accreditation Show less

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.

HM Treasury

View details

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.

HM Treasury

View details

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

View details

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 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 The Treasury told us that information about a possible criminal investigation was “among the most tightly restricted information” in order to avoid compromising an ongoing investigation and that it was unable to share this information. It asserted that, as the information was about Wyelands bank, not Greensill, and that the former was not applying to the Bank for accreditation, it considered this “a completely separate entity and a separate exercise”.49 It explained that the Bank of England wrote to it on 15 May 2020 with “more detailed, specific information” and that it had subsequently shared this information with the Department on 19 May 2020 as it knew that the Department was in discussion with Liberty Steel, another part of the GFG Alliance, regarding a request for direct government support, and it judged that the information was relevant to those discussions.50 However, this information was not shared with the Bank, as both the Treasury and the Department deemed it not relevant to the accreditation of Greensill. The Treasury explained that it treats sensitive information about companies carefully, in order to avoid adverse impact from its inadvertent disclosure.51 We noted that the sharing of information is a critical part of protecting taxpayers’ money. We therefore asked the Treasury if, given the legislation covering the sharing of information, there was any information that it could have shared that would have been helpful to the Bank or elsewhere in government. The Treasury told us it believed that it had shared all the information it should have.52 44 C&AG’s Report, para 1.15 45 Q 139 46 Q 139 47 Q 1 48 Q 3, Treasury Committee, Lessons from Greensill Capital, Sixth Report of Session 2021–22, HC 151, 14 July 2021 49 Q 3 5 Show less

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

View details

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.

HM Treasury

View details

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.

HM Treasury

View details

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.

HM Treasury

View details

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.

HM Treasury

View details

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.

HM Treasury

View details

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.

HM Treasury

View details

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

View details

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