UK Inquiry Tracker

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

15 Recommendations

6 Conclusions

1 Report

1 Oral session

2 Letters

1 Event

Activity timeline 5 events

25 Mar
2021

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty third report from Session 2019-21

13 Jan
2021

Correspondence

Correspondence from Catherine Lewis La Torre, Chief Executive, British Business Bank, re Covid-19: Bounce Back Loan Scheme report, dated 18…

16 Dec
2020

Report published

Thirty-third Report: Covid-19: Bounce Back Loan Scheme

5 Nov
2020

Oral evidence

COVID-19: Bounce Back Loans

5 Nov
2020

Correspondence

Correspondence from the British Business Bank, dated 3 November 2020 on the Bounce Back Loan Scheme (BBLS)

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

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Thirty-third Report: Covid-19: Bounce Back Loan Scheme	HC 687	16 Dec 2020	21	Responded

Recommendations & Conclusions

3 results

3 Recommendation Rejected

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 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 the first week and £21.3 billion in the first month, and as of 6 September, 90% of loans went to micro-businesses across the UK. This was achieved by removing the checks that extended the delivery period beyond 48 hours; increasing the level of risk through the lack of credit, application and affordability checks. Applicants need only to self-certify the data provided in their loan 6 Covid-19: Bounce Back Loan Scheme application. In the first year, Government is paying interest on the loans on behalf of borrowers, costing approximately £1 billion. In addition, taxpayers are exposed to both avoidable and unavoidable risks: fraud, viability of the underlying business, and unaffordability respectively. The Department estimates potential losses from both fraud and credit risk as somewhere between £15 billion to £26 billion, with the credit losses being the largest part. This estimate is highly uncertain and could be even higher. It indicates that Government was prepared to accept a higher level of risk to ensure that loans were available to SMEs as quickly as possible. Recommendation: Before launching or renewing a Scheme, HM Treasury should be explicit on the level of losses it is likely to entail and the evidence that this analysis is based on. 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 that its controls are cost effective and associated judgements reflect the appropriate balance between achieving immediate policy aims and protecting taxpayers’ money. It should start by assessing whether full reliance on self-certification is still appropriate. Show less

Government Response

The government explicitly disagrees with the recommendation to be explicit about likely losses before launching schemes, citing the need for rapid action during the pandemic and the high uncertainty of early estimates. It confirms the department is refining loss estimates for future updates to Parliament and will undertake a full impact assessment in the long term.

HM Treasury

View details

12 Recommendation Rejected

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

The government rejected the recommendation, stating that due to urgency and uncertainty, it was not possible to make explicit statements on likely losses before the scheme's launch, but it will refine estimates and update Parliament, and commit to a full impact assessment later.

HM Treasury

View details

14 Recommendation Rejected

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

The government rejected the recommendation, stating it does not intend to make public the details of its counter-fraud approach to avoid compromising its effectiveness, and that prosecution decisions are independent.

HM Treasury

View details

Government Response AI assessment · 21 of 15 classified

Accepted 10

Accepted in Part 1

Acknowledged 3

Not Addressed 4

Rejected 3

Total 15 recs + 6 conclusions

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