Source · Select Committees · Public Accounts Committee
Recommendation 4
4
The Bank has been insufficiently curious when identifying where money lent through the schemes, including...
Conclusion
The Bank has been insufficiently curious when identifying where money lent through the schemes, including by Greensill, has ultimately gone. Companies have borrowed around £30 billion under CBILS and CLBILS. The schemes’ rules require these funds be used to support business activity in the UK. However, the Bank does not track where the money it has lent as part of the schemes has gone and cannot guarantee the money has not been offshored. The Bank is unable to confirm how the £350 million Greensill loaned to GFG Alliance companies was used, or in Lessons from Greensill Capital: accreditation to business support schemes 7 which country the money was spent. The Bank believes the money has gone into a ‘central treasury function’ within the GFG Alliance, although it does not know where this is based. The Bank is relying on the work of Greensill’s administrators to identify where the loans have gone and, by extension, where the taxpayers’ exposure potentially lies. The Bank has published summary data showing the geographical split of where some of the money issued through its COVID-19 loan schemes has gone. However, this did not include regional and sectoral data for CLBILS owing to data protection and commercial considerations. Without knowing where the money has gone it will be impossible to say whether the objectives of the schemes to support UK businesses has been fully met, or whether taxpayers may be exposed to risks in the future. Recommendation: As a matter of urgency, the Bank should inform the Committee how it ensures that money lent under CBILS and CLBILS supports businesses in the UK and the British economy, how it monitors this in practice, and what action it would take if it discovered funds lent under these schemes have been offshored.
Government Response
Acknowledged
HM Government
Acknowledged
agree with the Committee’s conclusion. The department has a track record of delivering savings; the underlying cost of the Defence Equipment & Support (DE&S) managed element of the Equipment Plan has reduced by £5.4 billion since 2015, excluding Foreign Exchange or Front-Line Customer requirement changes. £5.7 billion of independently assured efficiencies have also been realised by DE&S since 2015. 4.3 Systems are in place to identify and share lessons as programmes are delivered and the department is working hard to ensure that Learning from Experience (LfE) information becomes increasingly standardised. The National Audit Office (NAO) report specifically commented favourably on some of the improvements that the department has made including the use of industry leading tools and processes for managing project delivery. DE&S, the MOD’s principal project Delivery Agent, has recently successfully achieved ISO9001 certification and the independent national certifying body commented specifically on the strong business information that drives performance throughout the portfolio and the continuous improvements that the organisation undertakes. 4.4 The most complex programmes are subject to regular deep dives by the department's most senior staff, providing support and challenge to SROs. MOD executives also regularly meet with industry chief executives of some of the most demanding projects. 4.5 In 2018, the department established a Strategic Partnering Programme (SPP) which is based on good practice principles, transparency and sharing of data and lessons between supplier and commissioner. Category management, also mentioned positively in the NAO report, is in place to support the MOD to deliver £628 million of cashable savings through more efficient ways of working. 4.6 The department is also implementing an Acquisition and Approvals Transformation Programme to improve programme delivery and embed continuous improvement. Proportionate, tailored, risk-based approaches to acquisition are being developed to drive increased pace while maintaining rigour in investment decision-making.