Source · Select Committees · Public Accounts Committee
Recommendation 20
20
We asked BEIS about efforts to estimate the level of fraud and error in the...
Conclusion
We asked BEIS about efforts to estimate the level of fraud and error in the Bounce Back Loan Scheme. BEIS told us it has commissioned PwC to undertake a sampling exercise to come up with a specific estimate of fraud which it expects to be completed in May 2021. BEIS explained that this exercise is taking time as it pulls together a lot of data sources to identify high-risk loans and that working through GDPR consequences, for 41 Government Counter Fraud Function, Cross-Government Fraud Landscape Bulletin 2019-20, February 2021 42 C&AG Guide’s, page 7 43 Letter from Mark Cheeseman, page 1–2 44 Q 33; Cabinet Office, Cross-Government Fraud Landscape Annual Report 2019, February 2020 45 C&AG Guide’s, page 7 46 C&AG Guide’s, page 12-13 47 Q 54 48 Letter from Jim Harra, 7 May 2021 49 Committee of Public Accounts, Department for Work and Pensions Accounts 2019–20, Twenty-Sixth Report of Session 2019–21, HC 681, 18 November 2020 50 Qq 57- 59 Fraud and Error 15 example, “takes care and effort and needs to be done right”. BEIS told us that the interim work performed to date demonstrated that the number of loans that it can pick out as being “absolutely fraud” is “really quite small” and that working through the subtleties that sit behind each application is “not an easy job”.51
Government Response
Not Addressed
HM Government
Not Addressed
3b: PAC recommendation: BEIS should write to the Committee within 3 months setting out how they will measure fraud and error in all their COVID-19 schemes and build prompt measuring of fraud and error into their future programmes from the outset. 3.6 The government agrees with the Committee’s recommendation. Target implementation date: November 2021 3.7 To give the Department for Business, Energy and Industrial Strategy (BEIS) more reliable estimates of the scale of fraud in the Bounce Back Loan Scheme, the British Business Bank (the Bank) and BEIS contracted Price Waterhouse Cooper in November 2020 to undertake statistical analysis of a random sample of successful loan applications. That 9 exercise has evaluated the occurrence of fraud and the results will enable the Bank to estimate with a higher degree of confidence the level of fraud across the scheme. Work is underway to extend the sampling exercise to the Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme. 3.8 For the COVID-19 Local Authority grants programme, BEIS has been working with the Office for National Statistics, Cabinet Office and internal auditors on a post-payment assurance process. For the first three schemes, implemented in Spring/Summer 2020, over 4,000 grants have been randomly sampled and stratified by local authorities in England. Work will commence shortly to assess the level of fraud and error within this sample and provide robust estimates for England, with initial results expected by December 2021. BEIS will develop a proportionate risk-based approach for the later schemes over the next twelve months. 3.9 The department continues to work closely with HM Treasury, the Cabinet Office and the NAO on the approach to future measurement exercises taking account of materiality, risks and costs. It recognises the importance of measuring fraud and error in its programmes, but such work will be undertaken on a risk basis to ensure resource is used as effectively as possible across the whole of the department’s counter fraud response.