Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Homes England forecasts that around 36% of homes (2,370 of the total 6,600 planned homes)...
Conclusion
Homes England forecasts that around 36% of homes (2,370 of the total 6,600 planned homes) built on the land remediated through funding intended for Starter Homes will meet the definition of affordable housing.16 We were concerned though that funding intended to support first-time buyers will in fact result in so many market-value homes.17 Homes England told us that the Starter Homes programme intended to recover 75% of costs from onward sale of land to developers. It told us that, to date, it had recovered over 60% of costs.18 Homes England told us that, pre-pandemic, it expected to recover the remaining forecast receipts within 18 months but it could not yet provide a revised position in light of Covid-19.19 First Homes
Government Response
Acknowledged
HM Government
Acknowledged
2020. HM Treasury, the Department for Business, Energy & Industrial Strategy (the department) and the British Business Bank (the Bank), based on a limited evidence of the underlying challenges for businesses, developed the Bounce Back Loan Scheme (the Scheme). The Scheme sought to provide businesses with loans of up to £50,000, or a maximum of 25% of annual turnover, to maintain their financial health during the covid-19 pandemic. The loans are delivered through commercial lenders such as banks and building societies. The Scheme expects lenders to approve and pay out the loans within 24 to 48 hours of application. To make the process as fast as possible the Scheme does not require lenders to check the information on the loan application form or to perform credit and affordability checks. Borrowers are expected to repay the loans in full but owing to the absence of these checks government provides lenders a 100% guarantee on the loans: if the borrower does not repay the loan, government will. The loans have a fixed interest rate of 2.5% and a maximum length of ten years; in the first year of the loan there are no capital repayments due, and government pays the interest—making it interest-free for the borrower. As of 15 November, the Scheme had provided over 1.4 million loans to businesses, totalling £42.2 billion. The Scheme will now run until 31 January 20211. Based on a report by the National Audit Office, the Committee took evidence, on 5 December 2020 from the HM Treasury, the department and the Bank. The Committee published its report on 16 December 2020. Relevant reports • NAO report: Investigation into the Bounce Back Loan Scheme – Session 2019-21 (HC 860) • PAC report: COVID 19: Bounce Back Loan Scheme – Session 2019-21 (HC 687) Government responses to the Committee