Recommendation 15

The Bank does not collect information on how businesses have used the loans.36 The NAO report outlined that there is some evidence that businesses are using the money to pay back existing debt, which the Bank describes as a ‘economically rational’ for businesses to do.37 But this would reduce the benefit of the Scheme as it would only make a small difference to a businesses’ available cash; it would, however, help lenders reduce their exposure to bad debts as the Scheme loans are subject to a government guarantee. The Bank said it will investigate how businesses have used the loans during 2021, which may be after the Scheme closes.38 This lack of data undermines the Bank’s ability to understand the impact of the Scheme, to monitor and report levels of fraud, and to use information to better inform future schemes. The Department told us that any initial evaluation of the Scheme will not start until 2021, with further reviews over time, across the six to ten year pay-back period.39 Rules for lenders to follow to debt recovery