Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Inconsistent lender data for Bounce Back Loans hinders accurate performance interpretation.
Conclusion
Lenders self-report on performance within the British Business Bank’s portal, and the Department has published data on this performance as at 31 July 2022.22 The portal was designed for administering the guarantee rather than managing the loans.23 Due to lenders following their ‘business as usual’ procedures there is inconsistency in the data reported which makes interpretation difficult. We asked the Department what actions they were taking where lenders were not performing to standard, and they told us that differences in the data were not necessarily reflective of performance differences, due to differences in circumstances and strategies.24
Government Response Summary
The government agrees with the committee and, despite rejecting the assertion of 'lack of curiosity,' is undertaking extensive work to improve outcomes. This includes developing the lender portal, standardising data, improving analysis, enhancing policies and procedures, piloting additional actions, and conducting targeted audits and negotiations to address poor lender performance.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2023 2.2 The Department for Business and Trade does not recognise the Committee’s description of its predecessor department, the Department for Business, Energy & Industrial Strategy’s, lack of curiosity regarding lender performance. 2.3 Driving positive outcomes in lender behaviour is an important tool to mitigate the risk of avoidable losses to the public purse. The Department for Business and Trade, British Business Bank (BBB) and other government stakeholders work closely with UK Finance and individual lenders to achieve this. 2.4 A Lender Performance Advisory Board provides government’s oversight and strategic advice, considers action to minimise losses and enables cross-government coordination and escalation routes. The Board is chaired by the responsible DBT Director General and brings together BBB’s Chief Executive with senior leaders from HM Treasury, Cabinet Office’s Public Sector Fraud Authority and UK Government Investments. 2.5 Current workstreams across these organisations include: • Improving data collection (and embedding those principles into future schemes from the outset), robustness, and transparency to help understand lender performance and prioritise interventions. Work is continuing to develop the lender portal, standardise data definitions, improve the analysis dashboard and review the range of data published. • Improving policies and procedures to ensure lenders are operating in accordance with scheme requirements and striving to minimise avoidable loss. This includes enhanced guidance for debt write-off; pilots testing the case for additional action when wrongdoing is suspected; and a Counter Fraud Strategy. • Targeted action to address individual lender poor performance and maximise recovery of associated losses. This includes audits on lender processes and performance from initial loan approval through to recoveries; claims and write-offs; negotiations to recover losses where poor performance is identified; and undertaking additional assurance activities. 2.6 DBT will provide a full response to the Committee by the implementation date.