Recommendation 24

The pandemic has highlighted the importance of carrying out robust risk planning and being clear about risk appetite and risk tolerance. Our previous work, including on support for children’s education during the pandemic and on the Bounce Bank Loans Scheme, has found that the government lacked pre-existing plans for many aspects of its response such as employment support schemes, support for people shielding and disruption to schooling.51 In the interests of speed, government took decisions at the start of the pandemic which it recognised would lead to a “massive increase in scale” of fraud, including relaxing some controls and streamlined spending approvals. HM Revenue & Customs’ planning assumptions were that between 5% and 10% of payments from the Coronavirus Job Retention Scheme (CJRS) and between 1% and 2% of payments from the Self-Employment Income Support Scheme (SEISS) were due to fraud and error. In September 2020, this amounted to between £2 billion and £3.9 billion for the CJRS and between £130 million and £270 million for the SEISS. The Department for Business, Energy & Industrial Strategy, in conjunction with the British Business Bank, has estimated that between 35% and 60% of loans from the Bounce Back Loans Scheme may not be repaid. In March 2021, the estimated value of these loans was between £16 billion and £27 billion based on loans to date.52