Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Provide the Committee with NATIS audit findings and Insolvency Service's fraud recovery performance.
Conclusion
The Department’s efforts to recover fraud losses incurred through the Bounce Back Loan Scheme have been largely unsuccessful, with only a small fraction of losses recovered to date, for which the Department is unable to confirm the value. The Department has estimated it will incur a total loss of at least £1.9 billion due to fraud within the Bounce Back Loan Scheme. The Department remains reliant primarily on lenders to recover losses due to fraud, despite the limited commercial incentives placed on those lenders due to the 100% guarantee provided. Of the amount paid by the Department to lenders under the guarantee, £130 million has been returned, but the Department is unable to confirm how much of this relates to fraud. The highest risk fraud cases were being passed to the National Investigation Service (NATIS) to investigate. But recoveries by NATIS have been minimal, with £8.6 million disclosed in the Department’s Annual Report and Accounts for 2023–24. The significant level of fraud within the Bounce Back Loan Scheme has been well known for years and has been subject to previous scrutiny by this Committee. The low value of recoveries, and the lack of clarity on the value of recoveries that relate to cases of suspected fraud, indicate that the actions taken to date by the Department have not been adequate. Following our evidence session in April, on 15 May 2025 the Department announced that its review of NATIS’ performance had shown public money was not being spent effectively, that NATIS would be audited to determine accurate figures for fraud recovery, and that the Insolvency Service will take over NATIS’s viable investigation cases. recommendation a. The Department should write to the Committee to provide the key findings from the NATIS audit, including the value of recoveries. b. The Department should write to the Committee in one year, to provide information on the performance of the Insolvency Service in recovering amounts lost due to fraud. 6
Government Response Summary
The government agrees and commits to writing to the Committee in one year to provide obtainable information on the Insolvency Service's performance in recovering fraud losses from the Bounce Back Loan Scheme. It did not address the request for NATIS audit findings.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Trade which, among other things, investigates instances of fraud and misconduct in respect of the BBLS, and brings fraudsters to justice and where appropriate, helps facilitate the recovery of loans taken out fraudulently. The department will write to the Committee in one year, providing information that is obtainable on the performance of the Insolvency Service in recovering amounts lost due to fraud.