BEIS Annual Report & Accounts 2021-22

Public Accounts Committee Closed Inquiry
Opened: 8 Nov 2022 Closed: 27 Jun 2023 Parliament page
The Committee will take evidence from banks which have lent money as part of the Bounce Back Loan Scheme, and afterwards question senior officials at the Department for Business, Energy and Industrial Strategy on their annual report and accounts for 2021-22 , including the performance of COVID support schemes such … Read more
6 Recommendations
18 Conclusions
1 Report
3 Letters
Activity timeline 5 events
27 Jun
2023
Report published
26 Apr
2023
Report published
23 Jan
2023
Correspondence
22 Nov
2022
Correspondence
22 Nov
2022
Correspondence
Title HC No. Published Items Response
Forty-Fifth Report - Department for Business, Energy & Industria… HC 1254 26 Apr 2023 24 Responded
Recommendations & Conclusions
24 results
2 Recommendation Accepted
Forty-Fifth Report - Department fo…
Identify reasons for Bounce Back Loan scheme performance variances and improve future data collection
The Department’s lack of curiosity surrounding lenders’ performance in the Bounce Back Loan Scheme increases the risk of losses for the taxpayer. The Bounce Back Loan Scheme was set up quickly, with limited requirements for what data lenders should collect … Read more
Government Response
The government agrees with the recommendation and is undertaking specific workstreams to improve data collection, reporting, robustness, and transparency for lender performance. This includes developing the lender portal, standardising data, improving analysis, and establishing better policies for future lending schemes.
HM Treasury
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3 Recommendation Accepted
Forty-Fifth Report - Department fo…
Publish BBLS counter-fraud strategy and report on recovery results and expenditure
The Department continues to make slow progress on its counter fraud activities related to the Bounce Back Loan Scheme. The Department’s counter-fraud response on BBLS started too late. The Department did not liaise with the Cabinet Office counter fraud function … Read more
Government Response
The government agrees and states it has developed an overarching BBLS Counter Fraud strategy, is considering publishing it, and the British Business Bank already publishes relevant data quarterly. It has also commissioned specific pilots (involuntary liquidation, enforcement, debt management specialist) to test additional recovery activities.
HM Treasury
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4 Recommendation Accepted
Forty-Fifth Report - Department fo…
Ensure 2022-23 annual report clearly documents progress against strategic priorities
The Department’s performance reporting in its annual report and accounts does not allow Parliament and the public to monitor progress towards its strategic priorities. The Department’s activities are wide-ranging, and it told us it has an ever-growing set of delivery … Read more
Government Response
The government agrees and will report against SR21 metrics in the 2022-23 Annual Report and Accounts, providing more contextual information around metrics. It will also review best practice to include more graphical presentation for user-friendliness.
HM Treasury
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5 Recommendation Accepted
Forty-Fifth Report - Department fo…
Set out how the Department ensures robust oversight and accountability for third parties delivering major policies.
It is not clear how the Department holds to account third parties that deliver multi-billion-pound programmes on its behalf. The Department stated that responsibility lies with the commercial bank lenders and local authorities and that it is the Department’s role … Read more
Government Response
The government agrees and states it uses designated Accounting Officers for public bodies, an Arm’s Length Body Review Programme, and Senior Responsible Officers for each scheme to ensure oversight and accountability. DBT is currently considering how to best manage future relationships and ensure consistency following machinery of government changes.
HM Treasury
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6 Recommendation Rejected
Forty-Fifth Report - Department fo…
Publish convictions for false declarations to Companies House and actions to identify and prosecute offenders.
Confidence in the Companies Register is undermined by errors and inaccuracies. Companies House, an executive agency of the Department, maintains the Register of Companies for England and Wales. The size of the register is growing, which the Department considers reflects … Read more
Government Response
The government disagrees with the recommendation, stating that most errors are accidental and corrected before prosecution, and courts are reluctant to sanction compliant parties. It highlights the forthcoming Economic Crime and Corporate Transparency Bill which will reform Companies House's powers, but does not commit to setting out conviction numbers or current prosecution actions.
HM Treasury
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7 Conclusion Accepted
Forty-Fifth Report - Department fo…
Post Office Horizon scandal victims still awaiting full and timely compensation.
Victims of the Post Office Horizon scandal continue to suffer as they await compensation due. The Horizon accounting system erroneously recorded shortfalls of cash in local Post Office branches over its more than 20-year lifetime. The Post Office blamed many … Read more
Government Response
The government agrees and provides detailed payment figures for both the Historical Shortfall Scheme (HSS) and overturned convictions as of 30 May 2023. It states 2,401 HSS offers have been issued totalling £98.7m (net) with 1,965 payments made totalling £67.7m, and expects remaining HSS offers by end of July. For overturned convictions, over £18.8m has been paid out in total.
HM Treasury
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1 Conclusion Accepted
Forty-Fifth Report - Department fo…
Committee receives evidence on BEIS 2021-22 Annual Report and Accounts performance.
On the basis of the Department’s 2021–22 Annual Report and Accounts, and the Comptroller and Auditor General’s report therein, we took evidence from the Department of Business, Energy and Industrial Strategy about its performance in 2021–22.1
Government Response
The government states that Business, Energy and Industrial Strategy can conclude recovery is unrealistic for certain debts due to business cessation, poor value for money, or reputational risk. DBT has also commissioned a Non-Executive Director to review assurance, reconciliation, and recovery activity for irregular payments, with a report due in Summer/early Autumn 2023.
HM Treasury
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8 Conclusion Deferred
Forty-Fifth Report - Department fo…
High levels of unrecovered fraud and error found in first wave business grants.
The Department estimated fraud and error levels of £985 million were contained in the £11.7 billion grant funding provided for the first wave of business support grant schemes (Small Business Grant Fund; Retail Hospitality and Leisure Grant Fund; and Local … Read more
Government Response
The government agrees with the committee's observations but states that recovery of irregular payments for early grant schemes is largely unrealistic. It has initiated a review by a Non-Executive Director into ongoing assurance, reconciliation, and recovery activity, with a target conclusion by Summer/early Autumn 2023, but does not address the point about disaggregating fraud and error estimates.
HM Treasury
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9 Conclusion Deferred
Forty-Fifth Report - Department fo…
Delayed recovery of fraud and error in business grants risking further losses.
Of the £985 million estimate of fraud and error for the first wave of business support grant schemes, the Department has recovered £5.3 million through NATIS and local authorities.16 This represents 0.7% of the fraud and error estimate. The Department … Read more
Government Response
The government agrees with the committee's concern but states that recovery for many irregular payments is unrealistic due to various factors. It has initiated a review by a Non-Executive Director into assurance, reconciliation, and recovery activity, expected to conclude by Summer/early Autumn 2023.
HM Treasury
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10 Conclusion Acknowledged
Forty-Fifth Report - Department fo…
Bounce Back Loan Scheme design left taxpayers exposed to significant fraud and error.
The Bounce Back Loan Scheme (BBLS) is the largest of the Covid-19 business support loan schemes, with 1.6 million loans approved, totalling £47.4 billion.19 BBLS gave the lender a full (100%) government-backed guarantee against the outstanding balance of the facility … Read more
Government Response
The government acknowledges the Department provided more than £38 billion for the Bounce Back Loans Scheme.
HM Treasury
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11 Conclusion Accepted
Forty-Fifth Report - Department fo…
Inconsistent lender data for Bounce Back Loans hinders accurate performance interpretation.
Lenders self-report on performance within the British Business Bank’s portal, and the Department has published data on this performance as at 31 July 2022.22 The portal was designed for administering the guarantee rather than managing the loans.23 Due to lenders … Read more
Government Response
The government agrees with the committee and, despite rejecting the assertion of 'lack of curiosity,' is undertaking extensive work to improve outcomes. This includes developing the lender portal, standardising data, improving analysis, enhancing policies and procedures, piloting additional actions, and conducting targeted audits and negotiations to address poor lender performance.
HM Treasury
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12 Conclusion Accepted
Forty-Fifth Report - Department fo…
Department fails to ascertain full extent of Bounce Back Loan data held by lenders.
The Department gathers information from the lenders in addition to the (notably limited) requirements in original agreements.25 We had also taken evidence from Natwest, HSBC, Starling Bank and Paragon Bank. The lenders told us that all information requested by the … Read more
Government Response
The government agrees with the committee and is actively working to improve lender performance and information gathering. This includes developing the lender portal, standardising data definitions, improving analysis, and reviewing the range of data published to ensure a comprehensive understanding of lender-held information.
HM Treasury
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13 Conclusion Acknowledged
Forty-Fifth Report - Department fo…
Initial fraud response for Bounce Back Loan Scheme lacked appropriate in-house function.
The inadequacy of the Department’s initial fraud response on the Bounce Back Loan Scheme has been well documented, through our previous report28, and the most recent NAO report on this topic.29 This included the lack of initial liaison with the … Read more
Government Response
The government agrees with the Committee's recommendation and highlights the development of a Bounce Back Loan Scheme (BBLS) Counter Fraud strategy, quarterly data publications on COVID-19 debt schemes, and a series of pilots to test the case for additional recovery activities.
HM Treasury
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14 Conclusion Acknowledged
Forty-Fifth Report - Department fo…
Department demonstrates progress in fraud response, updating risk assessment with lessons learned.
The Department has made progress in its fraud response. The Fraud Risk Assessment has been updated, although this identified additional fraud risks which were not considered at the point the scheme was launched.30 Notably, the Department told us about the … Read more
Government Response
The government agrees with the Committee's recommendation and highlights the development of a Bounce Back Loan Scheme (BBLS) Counter Fraud strategy, quarterly data publications on COVID-19 debt schemes, and a series of pilots to test the case for additional recovery activities.
HM Treasury
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15 Conclusion Accepted
Forty-Fifth Report - Department fo…
However, funding for counter fraud activities remains low, with limited recoveries being made.
However, funding for counter fraud activities remains low, with limited recoveries being made. The Department’s National Investigation Service (NATIS), a law enforcement agency partnered with the Department since September 2020, has received £13.2m in funding. The Department told us that … Read more
Government Response
The government agrees with the committee's conclusion and states the recommendation is implemented. It has developed an overarching BBLS Counter Fraud strategy and is commissioning a series of pilots to test additional recovery activities for suspected wrongdoing, with plans for next steps to consider further recovery action.
HM Treasury
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16 Recommendation Accepted in Part
Forty-Fifth Report - Department fo…
The National Audit Office recommended in December 2021 that the Department should produce a formal...
The National Audit Office recommended in December 2021 that the Department should produce a formal strategy, setting out the longer-term ambitions, objectives and metrics for the impact of successful counter-fraud actions; fraud risk appetite; and prioritisation of counter-fraud activities and … Read more
Government Response
The government states the recommendation is implemented, as the Department for Business and Trade has developed an overarching Bounce Back Loan Scheme Counter Fraud strategy and is considering making a version public. They also highlight ongoing data publication, PSFA support, and pilot schemes for recovery activities, though a broader departmental strategy is not explicitly committed.
HM Treasury
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17 Conclusion Acknowledged
Forty-Fifth Report - Department fo…
The Department is responsible for government’s business support grant schemes which have has provided local...
The Department is responsible for government’s business support grant schemes which have has provided local authorities with £25 billion of COVID-19 grant funding to allocate to eligible businesses since March 2020. Furthermore, the Department provided more than £38 billion for … Read more
Government Response
The government acknowledges the Department's responsibility for business support grant schemes and the Bounce Back Loans Scheme.
HM Treasury
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18 Conclusion Accepted
Forty-Fifth Report - Department fo…
The statement of AO’s responsibilities in the Department’s ARA outlines the Accounting Officer’s responsibility for...
The statement of AO’s responsibilities in the Department’s ARA outlines the Accounting Officer’s responsibility for the propriety and regularity of the finances allocated to them.36 This is reinforced through HM Treasury’s Managing Public Money 28 BEIS Annual Report & Accounts … Read more
Government Response
The government agrees with the committee's conclusion and states the recommendation is implemented. It outlines how public bodies' Chief Executives are designated as Accounting Officers responsible for robust governance and financial management, and how DBT is considering future relationships and assurance following machinery of government changes.
HM Treasury
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19 Conclusion Not Addressed
Forty-Fifth Report - Department fo…
In its written evidence, the Institute of Chartered Accountants in England and Wales (ICAEW) drew...
In its written evidence, the Institute of Chartered Accountants in England and Wales (ICAEW) drew attention to the Department’s response to our previous report on the BEIS Annual Report and Accounts.38 The ICAEW told us that the Department’s response did … Read more
Government Response
The government agrees with the committee's point but does not explicitly acknowledge overall responsibility for fraud recovery linked to Covid schemes, instead detailing existing accountability structures via designated Accounting Officers and Senior Responsible Officers. It is considering how best to manage future relationships and assurance following recent machinery of government changes.
HM Treasury
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20 Conclusion Accepted
Forty-Fifth Report - Department fo…
The Companies House annual report and accounts continues to show an increase in the number...
The Companies House annual report and accounts continues to show an increase in the number of the companies registered. The Department considers this to be a reflection of wider international trends and increased entrepreneurial activity.41 However, the rise in registrations … Read more
Government Response
The government disagrees with the committee's framing of the issue, particularly regarding 'fake entries,' but confirms and elaborates on its ongoing reforms through the Economic Crime and Corporate Transparency Bill. These reforms will strengthen Companies House's powers to improve transparency, check identities, and combat economic crime by enhancing investigation and enforcement.
HM Treasury
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21 Conclusion Rejected
Forty-Fifth Report - Department fo…
It has been an offence since 2009 to make a false return to Companies House,...
It has been an offence since 2009 to make a false return to Companies House, yet to date there is a record of just one conviction for this offence, in 2018. The Department was unable to confirm the number of … Read more
Government Response
The government disagrees with the Committee's implied criticism regarding the lack of convictions under existing powers, explaining that most errors are accidental and courts are reluctant to sanction subsequently-compliant offenders. However, it details new powers and reforms under the Economic Crime and Corporate Transparency Bill to strengthen enforcement and combat economic crime.
HM Treasury
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22 Conclusion Accepted
Forty-Fifth Report - Department fo…
The Horizon IT system used by sub postmasters and subpostmistresses erroneously recorded shortfalls of cash...
The Horizon IT system used by sub postmasters and subpostmistresses erroneously recorded shortfalls of cash in local Post Office branches over a 20-year period. The Post Office blamed many of the shortfalls on sub postmasters and sub postmistresses, despite it … Read more
Government Response
The government agrees with the Committee’s recommendation and has provided details of the total value of payments made to date and the proportion of the total payments that this represents, for both the Historical Shortfall and Historical Convictions schemes and indicated when it expects all claims to be settled.
HM Treasury
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23 Conclusion Accepted
Forty-Fifth Report - Department fo…
We drew the Department’s attention to media reports relating to individual cases where payments had...
We drew the Department’s attention to media reports relating to individual cases where payments had not yet been made or where claimants had been forced to accept half of what they were entitled to; and asked the Department what they … Read more
Government Response
The government agrees with the committee's conclusion and states the recommendation is implemented. It provides a detailed update on the significant progress in delivering compensation, including the number of offers and payments made under the Historical Shortfall Scheme and the Overturned Historical Convictions Scheme, and notes future funding for a tax treatment issue.
HM Treasury
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24 Conclusion Accepted
Forty-Fifth Report - Department fo…
Department funding significant Post Office compensation to avoid insolvency.
We asked whether the Department will in effect be funding the full bail out of the estimated compensation. The Department stated that of the estimated £150 million provided for the Historical Shortfall Scheme, £63.3 million will be funded by the … Read more
Government Response
The government agrees with the committee's conclusion and states the recommendation is implemented. It provides an update on the progress of compensation payments under both the Historical Shortfall Scheme and the Overturned Historical Convictions Scheme, detailing the number of offers and payments made, and notes further funding is being prepared for a tax treatment issue.
HM Treasury
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Government Response AI assessment · 24 of 6 classified
Accepted 14
Accepted in Part 1
Acknowledged 4
Deferred 2
Not Addressed 1
Rejected 2
Total 6 recs + 18 conclusions
Correspondence 3 letters
23 Jan 2023 Correspondence from Sarah Munby, Permanent Under-Secretary of State, re update Annual Reposts and Accounts, dated 21 December 2022
Parliament page
22 Nov 2022 Correspondence from Sarah Munby, Permanent Under-Secretary of State, Department for Business, Energy & Industrial Strategy (BEIS), re follow up to the first report – BEIS Annual Reports and Accounts 2020-2021 - the First Report of Session 2022–23”, published on 18 May 2022, date 16 November 2022
Parliament page
22 Nov 2022 Correspondence from Sarah Munby, Permanent Under-Secretary of State, Department for Business, Energy & Industrial Strategy (BEIS), re follow up to the first report – BEIS Annual Reports and Accounts 2020-2021, date 16 November 2022
Parliament page