COVID-19: Bounce Back Loan Scheme

Public Accounts Committee Closed Inquiry
Opened: 24 Sep 2020 Closed: 25 Mar 2021 Parliament page
This inquiry continues our work on government’s response to the Covid-19 pandemic. This inquiry focuses on the NAO’s report on the Bounce Back Loan Scheme : its purpose; how it functions; how it has performed to date; and how government manages the associated value for money risks – including the … Read more
1 Recommendation
20 Conclusions
1 Report
1 Oral session
2 Letters
1 Event
Activity timeline 6 events
25 Mar
2021
Report published
13 Jan
2021
Correspondence
16 Dec
2020
Report published
5 Nov
2020
Oral evidence
5 Nov
2020
Correspondence
5 Nov
2020
Formal meeting (oral evidence session) · The Boothroyd Room, Portcullis House
Oral evidence sessions 1 session
5 Nov 2020
View on parliament.uk
COVID-19: Bounce Back Loans
Catherine Lewis La Torre · British Business Bank Katherine Braddick · HM Treasury Patrick Magee · British Business Bank Sarah Munby · Department for Business, Energy and Industrial Strategy Sir Tom Scholar · HM Treasury
Title HC No. Published Items Response
Thirty-third Report: Covid-19: Bounce Back Loan Scheme HC 687 16 Dec 2020 21 Responded
Recommendations & Conclusions
21 results
2 Conclusion
Thirty-third Report: Covid-19: Bou…
The Scheme was implemented with impressive speed but does not strike the right balance between...
The Scheme was implemented with impressive speed but does not strike the right balance between supporting business and protecting the taxpayer. Thanks to the hard work and effort of civil servants, the Scheme was launched within two weeks of the … Read more
Government Response
2: PAC conclusion: The Scheme was implemented with impressive speed but does not strike the right balance between supporting business and protecting the taxpayer. 2: PAC recommendation: The Department should … Read more
HM Treasury
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3 Conclusion
Thirty-third Report: Covid-19: Bou…
Shortcomings in the Scheme’s design have exposed the taxpayer to potentially significant losses.
Shortcomings in the Scheme’s design have exposed the taxpayer to potentially significant losses. Government achieved its very narrow objective of distributing cash quickly and to a very large number of small businesses across the UK. It delivered £8.4 billion in … Read more
Government Response
3: PAC conclusion: Shortcomings in the Scheme’s design have exposed the taxpayer to potentially significant losses. 3a: PAC recommendation: Before launching or renewing a Scheme, HM Treasury should be explicit … Read more
HM Treasury
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4 Conclusion
Thirty-third Report: Covid-19: Bou…
Government’s plans for managing risks to the taxpayer—from both fraud and borrowers who are unable...
Government’s plans for managing risks to the taxpayer—from both fraud and borrowers who are unable to repay loans—are woefully under-developed. Government does not have a counter-fraud strategy for the Scheme and has not identified what types of fraud it will … Read more
Government Response
3b: PAC recommendation: For the remainder of this Scheme, and future schemes, HM Treasury must better balance the interests of the taxpayer with the interests of businesses. It should demonstrate … Read more
HM Treasury
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5 Conclusion
Thirty-third Report: Covid-19: Bou…
HM Treasury has not yet finalised the rules lenders need to follow to ensure overdue...
HM Treasury has not yet finalised the rules lenders need to follow to ensure overdue loans are repaid. If a borrower does not repay the loan HM Treasury expects lenders to try to recover the money owed. But there is … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The government has worked closely with UK Finance and accredited Scheme lenders to develop a consistent, industry-wide approach to … Read more
HM Treasury
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6 Recommendation
Thirty-third Report: Covid-19: Bou…
Government has no apparent plans to measure the Scheme’s impact, including identifying how many businesses...
Government has no apparent plans to measure the Scheme’s impact, including identifying how many businesses have been unable to access support. The Department indicates that its initial barometer for success was delivering cash to as many businesses in need, as … Read more
HM Treasury
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1 Conclusion
Thirty-third Report: Covid-19: Bou…
On the basis of a report by the Comptroller & Auditor General (C&AG), we took...
On the basis of a report by the Comptroller & Auditor General (C&AG), we took evidence from HM Treasury, the Department of Business, Energy & Industrial Strategy (the Department) and the British Business Bank (the Bank) on the Bounce Back … Read more
Government Response
2020. This sought views on the key considerations associated with cash access, including deposit and withdrawal facilities, cash acceptance, and regulatory oversight. The government is considering the responses and will … Read more
HM Treasury
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7 Conclusion
Thirty-third Report: Covid-19: Bou…
Both Germany and Switzerland delivered schemes to support small and medium- sized enterprises (SMEs) much...
Both Germany and Switzerland delivered schemes to support small and medium- sized enterprises (SMEs) much earlier than the UK.16 Their schemes offered 100% guarantees.17 CBILS, although in place at a similar time, offered an 80% guarantee attempting to remain line … Read more
HM Treasury
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8 Conclusion
Thirty-third Report: Covid-19: Bou…
Notwithstanding the lack of preparedness, it is clear that staff at HM Treasury, the Department,...
Notwithstanding the lack of preparedness, it is clear that staff at HM Treasury, the Department, and the Bank pulled out all the stops to get the Scheme up and running as quickly as possible; we should not underestimate the level … Read more
HM Treasury
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9 Conclusion
Thirty-third Report: Covid-19: Bou…
The Scheme is designed with the objective that borrowers receive the loans within 24–48 hours...
The Scheme is designed with the objective that borrowers receive the loans within 24–48 hours of a valid application. This target was based on independent research which suggested that one-third of businesses would probably not be able to access enough … Read more
HM Treasury
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10 Conclusion
Thirty-third Report: Covid-19: Bou…
The government’s view that businesses were unable to survive more than a two- week lockdown...
The government’s view that businesses were unable to survive more than a two- week lockdown period was based on anecdotal evidence, and a survey conducted by the Association of Chartered Certified Accountants in mid-April.23 The Department told us that its … Read more
Government Response
2: PAC conclusion: The Scheme was implemented with impressive speed but does not strike the right balance between supporting business and protecting the taxpayer. 2: PAC recommendation: The Department should … Read more
HM Treasury
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11 Conclusion
Thirty-third Report: Covid-19: Bou…
The Department informed us that the speed at which finance could be provided was a...
The Department informed us that the speed at which finance could be provided was a key design and operational requirement. We were told that the Department placed no budgetary cap on the Scheme and that demand was far greater than … Read more
Government Response
2: PAC conclusion: The Scheme was implemented with impressive speed but does not strike the right balance between supporting business and protecting the taxpayer. 2: PAC recommendation: The Department should … Read more
HM Treasury
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12 Conclusion
Thirty-third Report: Covid-19: Bou…
Under the Scheme, the Government pays a borrower’s first 12 months of interest directly to...
Under the Scheme, the Government pays a borrower’s first 12 months of interest directly to the lender. At the end of September, when some 1.2 million loans were issued, the Department and the Bank forecast this to cost £1,068 million … Read more
Government Response
3: PAC conclusion: Shortcomings in the Scheme’s design have exposed the taxpayer to potentially significant losses. 3a: PAC recommendation: Before launching or renewing a Scheme, HM Treasury should be explicit … Read more
HM Treasury
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13 Conclusion
Thirty-third Report: Covid-19: Bou…
The Bank told us that lenders are responsible for the Scheme’s fraud management.
The Bank told us that lenders are responsible for the Scheme’s fraud management. The Bank does, nevertheless, have a weekly lender fraud prevention collaboration working group, as well as conducting ‘data-analytics’ work with the Cabinet Office.32 Lenders are responsible for … Read more
Government Response
3b: PAC recommendation: For the remainder of this Scheme, and future schemes, HM Treasury must better balance the interests of the taxpayer with the interests of businesses. It should demonstrate … Read more
HM Treasury
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14 Conclusion
Thirty-third Report: Covid-19: Bou…
The Department has not identified what types of fraud it will prosecute, with the Department...
The Department has not identified what types of fraud it will prosecute, with the Department suggesting there is a range of criminality in fraud; it has euphemistically referred to ‘hard’ and ‘soft’ fraud.34 Hard fraud refers to a type of … Read more
Government Response
4: PAC conclusion: Government’s plans for managing risks to the taxpayer—from both fraud and borrowers who are unable to repay loans—are woefully under-developed. 4a: PAC recommendation: The Department needs to … Read more
HM Treasury
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15 Conclusion
Thirty-third Report: Covid-19: Bou…
The Bank does not collect information on how businesses have used the loans.36 The NAO...
The Bank does not collect information on how businesses have used the loans.36 The NAO report outlined that there is some evidence that businesses are using the money to pay back existing debt, which the Bank describes as a ‘economically … Read more
Government Response
6: PAC conclusion: Government has no apparent plans to measure the Scheme’s impact, including identifying how many businesses have been unable to access support. 6: PAC recommendation: The Department and … Read more
HM Treasury
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16 Conclusion
Thirty-third Report: Covid-19: Bou…
After the initial interest-free period, borrowers will need to make repayments (capital and interest) to...
After the initial interest-free period, borrowers will need to make repayments (capital and interest) to the end of the loan period, in line with their loan agreement.40 There is a high likelihood that some businesses who wish to re-pay the … Read more
Government Response
5: PAC conclusion: HM Treasury has not yet finalised the rules lenders need to follow to ensure overdue loans are repaid. 5: PAC recommendation: HM Treasury should ensure that the … Read more
HM Treasury
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17 Conclusion
Thirty-third Report: Covid-19: Bou…
HM Treasury and the Bank told us they are continuing to work with lenders on...
HM Treasury and the Bank told us they are continuing to work with lenders on debt recovery protocols and processes that are fair to businesses, lenders and taxpayers. HM Treasury expects lenders to try to recover the money owed but … Read more
Government Response
5: PAC conclusion: HM Treasury has not yet finalised the rules lenders need to follow to ensure overdue loans are repaid. 5: PAC recommendation: HM Treasury should ensure that the … Read more
HM Treasury
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18 Conclusion
Thirty-third Report: Covid-19: Bou…
HM Treasury explained to us that, at present, recoveries for the smaller loans are captured...
HM Treasury explained to us that, at present, recoveries for the smaller loans are captured and overseen by the FCA and, for larger loans, by the Lending Standards Board. Thus, although the details have not been clarified, there is already … Read more
Government Response
5: PAC conclusion: HM Treasury has not yet finalised the rules lenders need to follow to ensure overdue loans are repaid. 5: PAC recommendation: HM Treasury should ensure that the … Read more
HM Treasury
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19 Conclusion
Thirty-third Report: Covid-19: Bou…
The Government indicated that its overarching objective was speed.48 No written objectives were outlined at...
The Government indicated that its overarching objective was speed.48 No written objectives were outlined at the inception of the Scheme and no business case was put forward. The Bank, HM Treasury and the Department, did not agree the Scheme objectives … Read more
Government Response
6: PAC conclusion: Government has no apparent plans to measure the Scheme’s impact, including identifying how many businesses have been unable to access support. 6: PAC recommendation: The Department and … Read more
HM Treasury
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20 Conclusion
Thirty-third Report: Covid-19: Bou…
The National Audit Office has previously recommended that the Bank focus more 41 UK Finance...
The National Audit Office has previously recommended that the Bank focus more 41 UK Finance Written Evidence, para 27 42 Q 49 43 Q 70; C&AG’s Report, para 3.8 44 Q 72 45 Q 64 46 Qq 70, 71 47 … Read more
HM Treasury
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21 Conclusion
Thirty-third Report: Covid-19: Bou…
As HM Treasury informed us, during the 24 September Winter Economy Plan Statement, the Chancellor...
As HM Treasury informed us, during the 24 September Winter Economy Plan Statement, the Chancellor indicated there would be a further loan scheme, which is currently in development and will be announced early 2021.54 It is important that any replacement … Read more
HM Treasury
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Correspondence 2 letters
13 Jan 2021 Correspondence from Catherine Lewis La Torre, Chief Executive, British Business Bank, re Covid-19: Bounce Back Loan Scheme report, dated 18 December 2020
Parliament page
5 Nov 2020 Correspondence from the British Business Bank, dated 3 November 2020 on the Bounce Back Loan Scheme (BBLS)
Parliament page