Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Deferred
Delayed recovery of fraud and error in business grants risking further losses.
Conclusion
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
Government Response 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.
Government Response
Deferred
HM Government
Deferred
1.1 The Government agrees with the Committee’s recommendation. Target implementation date: Summer/early Autumn 2023 1.2 The Department for Business and Trade (DBT), previously the Department for Business, Energy and Industrial Strategy, can conclude recovery is unrealistic for the following reasons: • the business has ceased trading, with no residual assets and is not in administration; • recovery is poor VFM (the cost of litigation actions is higher than the debt) or • recovery is accepted as a significant reputational risk for DBT. 1.3 The government set out the latest position to the Committee at a hearing in relation to the Local Authority COVID-19 schemes which took place on 11 May 2023, following the recent report by the National Audit Office. The DBT has asked one of the Non-Executive Directors to undertake a review of the ongoing assurance, reconciliation, and recovery activity in relation to irregular payments and will write to the Committee following the conclusion of this review. 1.4 The review is aimed to conclude in Summer/early Autumn 2023.