Recommendation 17

HM Treasury and the Bank told us they are continuing to work with lenders on debt recovery protocols and processes that are fair to businesses, lenders and taxpayers. HM Treasury expects lenders to try to recover the money owed but there is no requirement to complete this recovery process before the lender can claim the government guarantee.43 HM Treasury is yet to outline the specific rules around the recovery process but plans, alongside the Bank, to complete the work in relation to the loan recovery process by winter 2020–21, in advance of the first loan repayments which are due in May 2021.44 The Department and the Bank are in the process of “codifying expectations for recoveries”. At present, lenders are expected to pursue unpaid loans using their own businesses processes, and there is a lack of clarity about when lenders can claim the guarantee.45 Currently, the recovery process is unique for each lender. Thus, without detailed rules, HM Treasury risks borrowers being treated differently depending on their lender, and a potentially inconsistent use of the Government guarantee.46