8
Conclusion
Forty-Fifth Report - Department for Bus…
Deferred
The Department estimated fraud and error levels of £985 million were contained in the £11.7 billion grant funding provided for the first wave of business support grant schemes (Small Business Grant Fund; Retail Hospitality and Leisure Grant Fund; and Local Authority Discretionary Grant Fund). The estimated fraud and error in …
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The Department estimated fraud and error levels of £985 million were contained in the £11.7 billion grant funding provided for the first wave of business support grant schemes (Small Business Grant Fund; Retail Hospitality and Leisure Grant Fund; and Local Authority Discretionary Grant Fund). The estimated fraud and error in these three schemes is significantly higher than the estimates for the second and third wave of grant schemes.12 The Department explained that this was due to the first wave of business support grant schemes not being application-based and relying on the existing system data of the local authorities, which in some cases led to overpayments in error.13 We asked the Department if it had attempted to recover the irregular payments for these schemes. The Department told us that the majority of the grants were paid in error and consequently will not be recovered as they were made to legitimate businesses who were struggling.14 The Department’s 2021–22 Annual Report and Accounts does not disaggregate their fraud and error estimate into separate fraud and error values.15
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Government response AI summary
The government agrees with the committee's observations but states that recovery of irregular payments for early grant schemes is largely unrealistic. It has initiated a review by a Non-Executive Director into ongoing assurance, reconciliation, and recovery activity, with a target conclusion by Summer/early Autumn 2023, …
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HM Treasury
9
Conclusion
Forty-Fifth Report - Department for Bus…
Deferred
Of the £985 million estimate of fraud and error for the first wave of business support grant schemes, the Department has recovered £5.3 million through NATIS and local authorities.16 This represents 0.7% of the fraud and error estimate. The Department explained that it will further refine the fraud and error …
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Of the £985 million estimate of fraud and error for the first wave of business support grant schemes, the Department has recovered £5.3 million through NATIS and local authorities.16 This represents 0.7% of the fraud and error estimate. The Department explained that it will further refine the fraud and error estimates for the second and third wave of schemes in the 2022–23 Annual Report and Accounts due to time and data constraints.17 The Department has deferred the wider recovery of irregular payments 11 BEIS, ARA 2021–22, pages 44, 147–151 12 BEIS, ARA 2021–22, pages 148, 150–151 13 Q 108 14 Q 110 15 BEIS, ARA 2021–22, page 148 16 BEIS, ARA 2021–22, page 87–88 17 BEIS, ARA 2021–22, page 150–152 12 Department for Business, Energy & Industrial Strategy Annual Report and Accounts 2021–22 until their assurance exercise for the second and third wave of business support grants has concluded. The longer the Department takes to start the recovery process, the lower the likelihood of successful recovery and potentially the greater the losses to the public purse.18 Lack of curiosity surrounding lenders’ performance in the Bounce Back Loan Scheme
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Government response AI summary
The government agrees with the committee's concern but states that recovery for many irregular payments is unrealistic due to various factors. It has initiated a review by a Non-Executive Director into assurance, reconciliation, and recovery activity, expected to conclude by Summer/early Autumn 2023.
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HM Treasury