The Department is being overly optimistic in the management of its loan book in the face of continuing uncertainty over future repayments. The Department, as at October 2024 had received less in repayments than was due, the level of insolvencies among its borrowers had been higher than it forecast, and over half of borrowers remained on a repayment holiday. Despite this, the Department continues to be optimistic in its expectations over the future levels of loan repayments and insolvencies. It expects repayment of all outstanding loans, but is unclear about the actions it would take for borrowers in financial difficulties. The Department stresses the need to take account of its policy objective of maintaining the viability 5 of the sectors where it has made loans when considering such actions, and any final decisions will be taken by ministers on a case–by–case basis. The Department also considers the level of potential fraud to date, of £2.2 million, to be relatively low, compared to other COVID–19 schemes. recommendation a. The Department should revisit its estimates of expected repayment levels and insolvency rates by December 2025 to reflect its experience once all borrowers have started to make repayments b. The Department should demonstrate a tough approach on behalf of taxpayers to managing those borrowers in trouble, including when considering these borrowers for any future additional financial support, such as grant funding or further loans from the Department.