Source · Select Committees · Public Accounts Committee
Recommendation 24
24
To understand how the Bank ensures that these schemes support UK businesses, we asked about...
Conclusion
To understand how the Bank ensures that these schemes support UK businesses, we asked about the barriers that were in place for preventing the offshoring of the taxpayer- guaranteed loans. The Bank responded that a requirement of the scheme was that “the economic benefit needs to go to the company—a single individual borrower”. We asked the Treasury and the Bank how they could be sure that all the money from the schemes remained onshore in the UK. The Bank told us that “tracking the money is a very relevant thing that we will be looking at over time and have looked at” but provided no further details on how this took place in practice other than referring to the eligibility criteria 61 Qq 52–53, 160 62 C&AG’s Report, para 3.11 63 Qq 54, 56 64 Q 104 65 Q 85; C&AG’s Report, para 3.15 66 Qq 157–160 67 Q 79, 82, 85 68 C&AG’s Report, Figure 1 69 Press Release – April 1, 2020 – British Business Bank (british-business-bank.co.uk) Q3: ‘How do I know if I am eligible to apply?’; CLBILS FAQs – April 16, 2020 – British Business Bank (british-business-bank.co.uk) Q: ‘What sectors can access the scheme?’ 70 Q 149 18 Lessons from Greensill Capital: accreditation to business support schemes for the schemes. The Bank emphasised that it had released summary data for its loan schemes, showing the regional distribution across the UK.71 The Bank had not published equivalent data for CLBILS owing to data protection and commercial considerations.72
Government Response
Not Addressed
HM Government
Not Addressed
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The Bank has written to the Committee on this matter on 17 December 2021. 4.3 Both the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) were designed with the intention of supporting a wide range of businesses, including those not wholly domiciled in the UK, as well as importers, so long as the loans are used in part to the benefit of the UK operations. Under scheme rules, a loan made will not be guaranteed if the borrower does not meet a range of eligibility criteria which determine if they are UK based. 4.4 As delegated schemes, lenders are required to have their own processes and controls in place to ensure that funds are used in accordance with the scheme rules. The Bank’s lender audit assurance programme includes testing to verify that UK eligibility criteria are being met. Experience from the first round of audits, which was focussed on loan application processes (including application of scheme eligibility criteria), showed it was effective in remedying identified issues and ensuring lenders took action to improve compliance under the scheme. 4.5 If a lender is found to have failed to properly apply scheme eligibility criteria, the Bank has a range of measures at its disposal to remedy the situation, including the removal of the guarantee.