UK Inquiry Tracker

Bounce Back Loans Scheme: Follow-up

Public Accounts Committee Closed Inquiry

Opened: 26 Nov 2021 Closed: 5 Dec 2022 Parliament page

In December 2020 the Committee published its first report on the “Bounce Back Loan” Scheme offered to registered - and unregistered - small businesses to help them get through and recover from Government-mandated closures and loss of business revenues during lockdown. At that time the PAC concluded that billions of … Read more

17 Recommendations

9 Conclusions

1 Report

2 Oral sessions

5 Letters

2 Events

Activity timeline 11 events

6 Dec
2022

Correspondence

Correspondence from Sarah Munby, Permanent Secretary for the Department for Business, Energy and Industrial Strategy (BEIS), re Treasury Mi…

5 Dec
2022

Oral evidence

Bounce Back Loans Scheme: Follow-up; BEIS Annual Report & Accounts 21-22

5 Dec
2022

Formal meeting (oral evidence session) · The Grimond Room, Portcullis House

BEIS Annual Report & Accounts 21-22

2 Sep
2022

Report published

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

27 Apr
2022

Report published

Fiftieth Report - Bounce Back Loans Scheme: Follow-up

22 Feb
2022

Correspondence

Correspondence from Sarah Munby Permanent Under-Secretary of State, Department for Business, Energy & Industrial Strategy, re PAC hearing o…

31 Jan
2022

Correspondence

Correspondence from Catherine Lewis La Torre, Chief Executive, British Business Bank, re Bounce Back Loans, dated 27 January 2022

11 Jan
2022

Correspondence

Correspondence from Stephen Pegge Managing Director, Commercial Finance UK Finance, re follow-up evidence session on the Bounce Back Loan S…

11 Jan
2022

Correspondence

Correspondence from Sarah Munby, Permanent Secretary, Department for Business, Energy & Industrial Strategy, re Covid loans - dissolutions …

10 Jan
2022

Oral evidence

Bounce Back Loans Scheme: Follow-up

10 Jan
2022

Formal meeting (oral evidence session) · The Grimond Room, Portcullis House

Bounce Back Loans Scheme: Follow-up

Oral evidence sessions 2 sessions

5 Dec 2022

View on parliament.uk

Bounce Back Loans Scheme: Follow-up; BEIS Annual Report & Accounts 21-22

Andrew Harrison · NatWest Anne Boden · Starling Bank Dave Newcombe · Paragon Banking Group Gemma Peck · Department for Business, Energy & Industrial Strategy Karl Reid · HSBC Sarah Munby · Department for Business, Energy and Industrial Strategy Tom Taylor · Department for Business, Energy & Industrial Strategy

10 Jan 2022

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Bounce Back Loans Scheme: Follow-up

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 Sheldon Mills · Financial Conduct Authority

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Fiftieth Report - Bounce Back Loans Scheme: Follow-up	HC 951	27 Apr 2022	26	Responded

Recommendations & Conclusions

4 results

2 Recommendation Not Addressed

Fiftieth Report - Bounce Back Loan…

The potential Scheme losses are eye-watering, and we are not convinced the Department has the...

The potential Scheme losses are eye-watering, and we are not convinced the Department has the data it needs to manage the risks to the taxpayer. The Department estimated in its 2020–21 Annual Report and Accounts that it would lose £17 … Read more The potential Scheme losses are eye-watering, and we are not convinced the Department has the data it needs to manage the risks to the taxpayer. The Department estimated in its 2020–21 Annual Report and Accounts that it would lose £17 billion as a result of the Scheme, of which £4.9 billion was because of fraud. We have seen similarly high levels of expected losses due to fraud in other Covid-19 business support schemes, with losses from fraud and error within the furlough and self-employment schemes estimated at £5.7 billion. This staggering amount of taxpayer money could have been spent on improving existing public services. The Department admits that fraud within the Scheme falls well outside what it would consider a tolerable level, although it cannot tell us what that level should be. Its fraud estimate does not include all potential types of fraud, such as suspected turnover inflation fraud to claim larger loans than a borrower is entitled to. To date, it has allocated just £32 million to countering fraud and does not know whether lenders or other stakeholders, including law enforcement agencies, have the resources they need to counter fraud. The Department reports its estimates of losses once each year and these have a high level of uncertainty. The Bank’s loan data from the 24 commercial lenders under the Scheme has data limitations as each lender categorises and reports data in a slightly different way. The Department is trying to improve its approach to quantifying losses in the Scheme, but it is almost two years since its launch. 6 Bounce Back Loans Scheme: Follow-up Recommendation: The Department should, within the next 3 months, develop a strategy setting out the increase needed in Scheme counter-fraud resources for all relevant government stakeholders to both reduce fraud levels to a tolerable level and to maximise recoveries. As part of its Treasury Minute response, the Department should explain how it intends to improve the accuracy and timeliness of Show less

Government Response

The government's response discusses Électricité de France’s (EDF) strategies, plans and the estimated costs, which are scrutinised, challenged, and approved by the Non-NDA liabilities assurance team (NLA) under the terms of the revised funding agreement. It does not address the committee's recommendation to develop a strategy setting out the increase needed in Scheme counter-fraud resources, or explain how to improve the accuracy and timeliness of data.

HM Treasury

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7 Recommendation Not Addressed

Fiftieth Report - Bounce Back Loan…

The Department has not yet identified how it will share the lessons from the Scheme.

The Department has not yet identified how it will share the lessons from the Scheme. The Department asserts that it has applied some of the lessons it has learned from this Scheme in the subsequent Recovery Loan Scheme, such as … Read more The Department has not yet identified how it will share the lessons from the Scheme. The Department asserts that it has applied some of the lessons it has learned from this Scheme in the subsequent Recovery Loan Scheme, such as introducing additional reporting requirements on lenders. It also recognises that it needs to ensure stronger counter-fraud capability and data-sharing across government to be in place from the start of any future scheme. Yet these learnings should have been obvious following the Department’s experience in the Financial Crisis when its approach was similarly reactive. We are surprised that the Department and the Bank were so ill-prepared to respond an economic shock, irrespective of the nature of the pandemic. The Department recognises that it would have been possible to design the outline of the Scheme five years ago, but it would not have planned for a scheme of this type because its pandemic preparedness plan did not foresee an event of such gravity. In responding to the pandemic, the Department was able to draw on some of the planning from its experience during the UK’s exit from the EU. Carrying lessons forward to future schemes, however, is hindered by the Department’s lack of corporate memory, with staff moving to other roles. The Department is shortly due to publish the findings of its first of three evaluations of the Scheme, as part of its three-year Scheme evaluation programme, but it has not shared any plans about how it would disseminate the lessons-learned across government. Recommendation: The Department and the Bank should establish a strategy on how it intends to share lessons from the scheme within a month of the publication of their first evaluation report. The Bank should develop a business case for an emergency loan scheme for future crisis within 6 months of publication of this report. Bounce Back Loans Scheme: Follow-up 9 1 Scheme risks and management The Bounce Back Loan Scheme Show less

Government Response

The government's response discusses the Programme's uncertainty and states the CEO of the Delivery Authority will remain accountable for the skills and expertise to deliver the Programme, and their independence remains unchanged. An interim CEO was announced to assess capability and capacity gaps within the sponsor function to ensure it has the necessary skills and expertise. It does not address the committee's recommendation for the Department and the Bank to establish a strategy on how it intends to share lessons from the scheme within a month of the publication of their first evaluation report, or the Bank to develop a business case for an emergency loan scheme for future crisis within 6 months of publication of this report.

HM Treasury

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9 Conclusion

Fiftieth Report - Bounce Back Loan…

The Bank began collecting Scheme loan data from the 24 Scheme lenders in July 2021,...

The Bank began collecting Scheme loan data from the 24 Scheme lenders in July 2021, where lenders provide data to the Bank via a collections system. The Bank said that it holds loan data from lenders across 70 different datapoints, … Read more

HM Treasury

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21 Conclusion

Fiftieth Report - Bounce Back Loan…

Lenders used their own funds to make Scheme loans, with government guaranteeing to reimburse lenders...

Lenders used their own funds to make Scheme loans, with government guaranteeing to reimburse lenders if borrowers do not repay. How lenders raise funds differs according to size and type of lender; the more cheaply they can raise funds the … Read more

HM Treasury

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Government Response AI assessment · 24 of 17 classified

Accepted 21

Acknowledged 1

Not Addressed 2

Total 17 recs + 9 conclusions

Correspondence 5 letters

6 Dec 2022 Correspondence from Sarah Munby, Permanent Secretary for the Department for Business, Energy and Industrial Strategy (BEIS), re Treasury Minute Response – “Bounce Back Loans Scheme: Follow-up” (50th Report of Session 2021-22) 30 November 2022

Parliament page

22 Feb 2022 Correspondence from Sarah Munby Permanent Under-Secretary of State, Department for Business, Energy & Industrial Strategy, re PAC hearing on the Bounce Back Loan Scheme, dated 9 February 2022

Parliament page

31 Jan 2022 Correspondence from Catherine Lewis La Torre, Chief Executive, British Business Bank, re Bounce Back Loans, dated 27 January 2022

Parliament page

11 Jan 2022 Correspondence from Stephen Pegge Managing Director, Commercial Finance UK Finance, re follow-up evidence session on the Bounce Back Loan Scheme, dated 23 December 2021

Parliament page

11 Jan 2022 Correspondence from Sarah Munby, Permanent Secretary, Department for Business, Energy & Industrial Strategy, re Covid loans - dissolutions objections incident, dated 4 January 2022

Parliament page