Fiftieth Report - Bounce Back Loans Scheme: Follow-up

Select Committee

Public Accounts Committee HC 951 27 April 2022

Report Status Response document linked Recorded deadline: 27 Jun 2022

Missing links do not establish that no response was published. A linked document does not verify responses to individual findings.

Conclusions & Recommendations 26 items (17 recs)

Source View on Parliament website

No response data available yet.

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Fiftieth report from Session 2021-22 · published 2 Sep 2022

Read the government response ↗ Response on the tracker

Recommendations & Conclusions

26 results

2 Recommendation

The potential Scheme losses are eye-watering, and we are not convinced the Department has the...

Recommendation

The potential Scheme losses are eye-watering, and we are not convinced the Department has the data it needs to manage the risks to the taxpayer. The Department estimated in its 2020–21 Annual Report and Accounts that it would lose £17 … Read more The potential Scheme losses are eye-watering, and we are not convinced the Department has the data it needs to manage the risks to the taxpayer. The Department estimated in its 2020–21 Annual Report and Accounts that it would lose £17 billion as a result of the Scheme, of which £4.9 billion was because of fraud. We have seen similarly high levels of expected losses due to fraud in other Covid-19 business support schemes, with losses from fraud and error within the furlough and self-employment schemes estimated at £5.7 billion. This staggering amount of taxpayer money could have been spent on improving existing public services. The Department admits that fraud within the Scheme falls well outside what it would consider a tolerable level, although it cannot tell us what that level should be. Its fraud estimate does not include all potential types of fraud, such as suspected turnover inflation fraud to claim larger loans than a borrower is entitled to. To date, it has allocated just £32 million to countering fraud and does not know whether lenders or other stakeholders, including law enforcement agencies, have the resources they need to counter fraud. The Department reports its estimates of losses once each year and these have a high level of uncertainty. The Bank’s loan data from the 24 commercial lenders under the Scheme has data limitations as each lender categorises and reports data in a slightly different way. The Department is trying to improve its approach to quantifying losses in the Scheme, but it is almost two years since its launch. 6 Bounce Back Loans Scheme: Follow-up Recommendation: The Department should, within the next 3 months, develop a strategy setting out the increase needed in Scheme counter-fraud resources for all relevant government stakeholders to both reduce fraud levels to a tolerable level and to maximise recoveries. As part of its Treasury Minute response, the Department should explain how it intends to improve the accuracy and timeliness of Show less

HM Treasury

Fiftieth Report - Bounce Back Loans Scheme: Follow-up

Recommendations & Conclusions

The potential Scheme losses are eye-watering, and we are not convinced the Department has the...

The Department has been complacent in preventing Scheme fraud and its prioritisation of ‘top tier’...

We are concerned that the Department is placing too much reliance on lenders to minimise...

It is unacceptable that the Department has no plans to recover outstanding debt after lenders...

The Scheme has distorted the Small and Medium Enterprise (SME) lending market in favour of...

The Department has not yet identified how it will share the lessons from the Scheme.

On the basis of a report by the Comptroller and Auditor General, we took evidence...

The Department’s estimate of the credit loss within the Scheme is also uncertain, as there...

The Bank began collecting Scheme loan data from the 24 Scheme lenders in July 2021,...

The Scheme rules required commercial lenders to deliver loans and pursue recovery processes in line...

Although the Department referred to lenders as the “arms and legs” of the Scheme, none...

The Scheme requires lenders to pursue borrowers for missed repayments for up to 12 months...

The NAO reported that the arrangements for pursuing borrowers offered limited commercial incentive for lenders...

Almost 86,000 borrowers have been in arrears for more than 90 days as of 10...

The Department and the Bank recognised that there was a trade-off between getting loans to...

The Scheme has also made trade-offs in its response to countering fraud and the associated...

We asked the Department if it was confident that enough was being done to tackle...

We reported previously that the Department had no apparent plans to measure the Scheme’s long-term...

We asked the Department whether it currently had the information that it needed to determine...

Business survival rates are a key metric for measuring the Scheme’s impact.

Lenders used their own funds to make Scheme loans, with government guaranteeing to reimburse lenders...

The NAO reported that there were seven accredited lenders when the Scheme launched in May...

The Bank recognised that it was “absolutely true that [the Scheme] had a distortive effect”...

We highlighted previously that government needed to use the lessons learned from this Scheme to...

We were concerned that the Department should have identified these lessons when it supported businesses...

We asked whether, with hindsight and more time, it would have been possible to design...