Source · Select Committees · Public Accounts Committee
Recommendation 31
31
We asked BEIS about plans to recover loans made as part of the Bounce Back...
Conclusion
We asked BEIS about plans to recover loans made as part of the Bounce Back Loan Scheme. BEIS told us that in the first instance, it is the banks responsibility to manage recovery in line with their usual processes.92 BEIS explained that it is planning to work with the police to carry out criminal investigations, and pursue a civil recoveries programme 83 Q 51 84 C&AG’s Guide page 7 85 Q 81 86 Qq 81, 83 87 Q 27 88 Q 25 89 Q 88 90 Q 25 91 Qq 85-86 92 Q 61 Fraud and Error 19 where potential frauds impact multiple banks...93 BEIS told us it has also taken on police support for enforcement of the most organised, serious, highly criminal cases of fraud in the local authority grant schemes, though local authorities remain responsible for the low- level recoveries process.94 93 Q 63 94 Q 70 20 Fraud and Error
Government Response
Not Addressed
HM Government
Not Addressed
7b: PAC recommendation: BEIS should write to the Committee within three months setting out details of steps it will take to assess whether the recovery efforts of banks are reasonable, and the steps it will take to recover taxpayers’ money if deficiencies are identified. 7.5 The government agrees with the Committee’s recommendation. Target implementation date: November 2021 7.6 In view of the economic disruption caused by COVID-19 pandemic, ministers decided to implement the Bounce Back Loan Scheme despite its design creating a significant risk of high levels of credit and fraud losses. Significant credit losses are likely to materialise across the schemes given the wider economic impact of the pandemic, and there will be a proportion of loans that will not be recoverable. Despite these challenges, the government has taken significant steps to safeguard public money since launch, and BEIS and the British Business Bank (the Bank) continue to work closely with UK Finance and accredited scheme lenders to implement a consistent, industry-wide approach to collection and recovery. 7.7 The Bank has mechanisms in place to ensure lenders are complying with scheme rules including in relation to recovery. KPMG and RSM UK are undertaking an independent audit and assurance programme on behalf of the Bank. Each lender audit reviews a sample of accounts, claims and processes to confirm satisfactory performance. In circumstances where a lender cannot demonstrate that these have been met, the Bank can take remedial steps including to offset guarantee claims. 7.8 The Bank is held to account by BEIS on the effectiveness of its audit and assurance programme through regular governance meetings, such as monthly and quarterly shareholder meetings, audit committee meetings (where a shareholder representative is present on behalf of BEIS), as well as monitoring performance against its annual business plan. Given the contractual relationship between the Bank and the lenders, the lender audits can only focus on lenders’ activity against what is set out in the Guarantee Agreement. The audits do not cover any voluntary, additional checks that lenders are undertaking. 7.9 BEIS continues to work with the Bank, other government departments, and law enforcement colleagues on its counter-fraud enforcement activity and approach.