Source · Select Committees · Public Accounts Committee
Recommendation 18
18
We reported previously that the Department had no apparent plans to measure the Scheme’s long-term...
Conclusion
We reported previously that the Department had no apparent plans to measure the Scheme’s long-term impact, and no agreed performance measures.44 In its Treasury Minute response to our report, the Department gave a high-level summary of the Scheme’s evaluation plans which aimed for an initial assessment by Autumn 2021. However, it did not provide any detail on how it intended to measure performance.45 As a follow-up, we asked the Department for its latest views on the wider impact of the Scheme, and how it was gaining assurance that the Scheme was working. It said that the Scheme had met its initial goals, in terms of the pace of delivery and the diversity of firms supported, which it considered was reassuring. The NAO found that the Scheme delivered 90% of loans to micro-businesses in the first two months. The Department told us that initial signs showed that there had been no “big spike in failures” that might have happened without the Scheme in place.46
Government Response
Not Addressed
HM Government
Not Addressed
1: PAC conclusion: The Department and The Bank delivered the Scheme at breakneck speed, but the long-term impact of the Scheme is uncertain. 1a: PAC recommendation: The Department should put in place a clear strategy to manage the long-term legacy of the Scheme within a month of the publication of its evaluation report. 1.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 1.2 The ongoing management of the Bounce Back Loan Scheme (BBLS) remains one of the highest priorities for the department. A key component of this is the work being undertaken to tackle fraud in the scheme, and the department is currently formalising a strategy that will set out its long-term approach to counter fraud in the BBLS, building on work to date. The strategy will reflect recent developments in the government’s counter fraud landscape, including how additional funding made available by the Chancellor in the Spring Statement will be deployed. The department expects to finalise the strategy by Autumn 2022. 1.3 More broadly, the department’s strategy for managing the long-term legacy of the scheme will develop as its understanding of the scheme’s impact matures. The first evaluation report published in June 2022 provided an indication of the short-term impact of the scheme on business outcomes, though the longer-term impact will only become apparent in time and will depend in large part on wider economic conditions. The economic impact of the scheme will be explored further in subsequent phases of the evaluation, which will also include a value for money assessment. 1.4 Regular monitoring of data about loan facilities provided by lenders enables the department to assess the health of the loan book on an ongoing basis. Amongst other things, this information gives an indication of the proportion of borrowers who are experiencing difficulty in making their repayments. Meanwhile, the British Business Bank’s expected credit loss models provide a longer term forecast of the eventual level of defaults. BEIS reports on expected credit losses in relation to the scheme via its Annual Report and Accounts. 1.5 Finally, the department undertakes regular analysis to understand the financial health of the wider UK small and medium-sized enterprises (SME) population, which helps to inform ongoing policy development.