Source · Select Committees · Public Accounts Committee
Recommendation 26
26
Accepted
BBLS fraud losses of £1.9 billion likely underestimate the true total
Conclusion
The Department has estimated that total losses due to fraud on the BBLS will be at least £1.9 billion. This figure is the sum of losses on defaulted loans that lenders have reported as suspected fraud, and future losses estimated by the Department by applying its suspected fraud loss rate to the open loan book. The Department has acknowledged that not all cases of fraud will have been identified by lenders and that total losses due to fraud will exceed the figure quoted.44
Government Response Summary
The government acknowledges the estimated £1.9 billion BBLS fraud losses and commits to providing key findings from the National Investigation Service (NATIS) audit by August 2026, along with information on the Insolvency Service's performance in recovering fraud losses by July 2026.
Government Response
Accepted
HM Government
Accepted
4. PAC 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. 4a. PAC recommendation: The Department should write to the Committee to provide the key findings from the National Investigation Service (NATIS) audit, including the value of recoveries. 4.1 The government agrees with the Committee’s recommendation Target implementation date: August 2026 4.2 The department remains committed to reducing loss to the taxpayer, and continues to work across government, law enforcement and commercial lenders to address fraud in relation to the Bounce Back Loan Scheme (BBLS). 4.3 The Insolvency Service will take over NATIS’s viable cases of Covid-19 financial support fraud (the majority in relation to the BBLS), in a bid to recoup taxpayers’ money lost to fraudsters. The Insolvency Service has a well-established record of managing fraud and misconduct cases. This enforcement activity is in addition to recovery work being undertaken by lenders. The department has commissioned an audit by the Government Internal Audit Agency to further assess recovery efforts and address any reporting failures from NATIS. The department will submit its written findings to the Committee before the end of August 2026. 4.4 As of 31 March 2025, the Insolvency Service has disqualified 2,167 directors, imposed bankruptcy restrictions on 343 individuals, and secured 55 criminal convictions for COVID-19 financial support scheme misconduct, mostly involving Bounce Back Loans. 4b. PAC recommendation: 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. 4.5 The government agrees with the Committee’s recommendation. Target implementation date: July 2026 4.6 The Insolvency Service is an executive agency of the Department for Business and 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. 4.7 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.