UK Inquiry Tracker

Local authority administered COVID grant schemes

Public Accounts Committee Closed Inquiry

Opened: 29 Mar 2023 Closed: 18 Nov 2023 Parliament page

COVID-19 pandemic restrictions varied over time and between different parts of the country, but all had an impact on businesses, many of which were forced to temporarily close or curtail their operations. The government announced in early March 2020 that it would provide grants, administered by local authorities, to support … Read more COVID-19 pandemic restrictions varied over time and between different parts of the country, but all had an impact on businesses, many of which were forced to temporarily close or curtail their operations. The government announced in early March 2020 that it would provide grants, administered by local authorities, to support smaller businesses in England. The National Audit Office has said in its report that government achieved its primary objective to deliver financial support to businesses quickly during the COVID-19 pandemic . BEIS prioritised speed over conducting pre-payment checks for the schemes launched at the start of the pandemic, but did not then act quickly to conduct follow-up checks. As the PAC has also reported, the delays in following-up have made the recovery of amounts wrongly paid more difficult to achieve. Department for Business and Trade (DBT), which is now responsible for these schemes, has still to report on the impact of these grants: for example in terms of maintaining jobs and how much support might have been given to businesses that did not need it. Without such an assessment an overall judgement about the value for money of the schemes remains open. Dame Meg Hillier MP, Chair of the PAC, commenting on the NAO’s findings, said: “Government moved at speed to provide grants to businesses to support the high street during the pandemic. “However in doing so, an estimated £1.1bn was lost to fraud and error, and to date only 1% of this has been recovered. “It is now up to the Department for Business and Trade and the rest of government to act on the lessons from this experience it has learnt so it can be on the front foot for the next crisis.” The Committee will question senior officials at the Department for Business and Trade and HM Treasury including on how effectively the government set up and delivered the grant schemes. If you have relevant evidence to inform this questioning, please submit it here by 23:59 on Wednesday 26 April. Please have a look at the requirements for written evidence submissions and note the Committee cannot accept as evidence material that has been published elsewhere. Show less

2 Recommendations

25 Conclusions

1 Report

1 Oral session

2 Letters

1 Event

Activity timeline 6 events

18 Nov
2023

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Sixty-eighth report from Session 2022-23

6 Sep
2023

Report published

Sixty-Eighth Report - Local authority administered COVID support schemes in England

12 Jun
2023

Correspondence

Correspondence from Gareth Davies, Permanent Secretary, Department for Business and Trade, re local authority administered Covid grant sche…

24 May
2023

Correspondence

Correspondence from Philip Duffy, Director General, Growth and Productivity, HM Treasury, re Local authority administered COVID grant schem…

11 May
2023

Oral evidence

Local authority administered COVID grant schemes

11 May
2023

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

Local authority administered COVID grant schemes

Oral evidence sessions 1 session

11 May 2023

View on parliament.uk

Local authority administered COVID grant schemes

Anastasia Osbourne · Department for Business and Trade David Bickerton · Department for Business and Trade Gareth Davies CB · Department for Business and Trade Phil Duffy · HM Treasury

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Sixty-Eighth Report - Local authority administered COVID support…	HC 1234	6 Sep 2023	27	Responded

Recommendations & Conclusions

18 results

2 Conclusion Accepted

Sixty-Eighth Report - Local author…

Ensure rigorous review of loss recovery approach, assessing public value and setting targets for recoverable figures.

The Departments have been slow to take effective action to recover losses – three years since the Department for Business, Energy & Industrial Strategy introduced the schemes, less than 2% of the estimated £1.1 billion lost to error and fraud … Read more

Government Response

The government agrees. A review has been undertaken by the DBT's Audit and Risk Assurance Committee Chair, with findings presented. Work is underway to implement recommendations, including re-contacting local authorities, streamlining recovery processes, piloting a digital tool for viability assessment, and fast-tracking fraud referrals for litigation.

HM Treasury

Local authority administered COVID grant schemes

Activity timeline 6 events

Oral evidence sessions 1 session

Reports 1 report · click to expand

Recommendations & Conclusions

Ensure rigorous review of loss recovery approach, assessing public value and setting targets for recoverable figures.

Share grant management approach across government and ensure early application in new scheme design.

Estimated £1.1 billion losses from grant scheme fraud and error, primarily in first cohort.

Delayed debt recovery guidelines and lack of enforcement for local authority recovery efforts.

DBT lacks definitive figures on fraud and error split within COVID support schemes.

Only 2% of £1.1 billion in COVID scheme losses recovered by May 2023.

DBT faces substantial challenges and high costs in recovering irregular COVID payments.

DBT reconsiders local authority recovery incentives and commissions review on irregular payments.

Limited local authority input and outdated data contributed to COVID grant payment errors.

Insufficient departmental understanding of small businesses resulted in ambiguous COVID grant guidance.

DBT strengthened policy-delivery links; new legislation to improve business rates data sharing.

Increased departmental capacity and local engagement improved later, more targeted grant schemes.

DBT has established a specialist grants directorate to improve design and delivery.

Central and local government made significant efforts delivering pandemic business grants.

Effectiveness of pandemic business grants and their impact remains unknown.

Government lacked contingency plans for emergency country-wide business support schemes.

Absence of contingency plans caused scramble and flawed early scheme design.

Pandemic lessons being fed into Cabinet Office for future grant consistency.

Government Response AI assessment · 27 of 2 classified

Correspondence 2 letters