Norfolk MP says 'lessons to be learned' over loans costing taxpayers billions
- Credit: Richard Townshend Photography
A Norfolk MP said there are lessons to be learned from a damning report which warns the taxpayer will lose billions from a government scheme to support businesses through the pandemic.
More than £47bn was handed out in loans to small businesses under the Bounce Back scheme launched in May 2020, while the UK was in lockdown following the outbreak of the Covid-19 pandemic.
Now the Commons Public Accounts Committee says more than 10pc of the money was ripped off by fraudsters, while billions more may never be repaid.
In a report it warns: "The latest data shows that business survival has come at a cost to the taxpayer. The department estimates that an eye-watering £17bn of taxpayers’ money given out in loans will be lost, £4.9bn of which is the result of fraud.
"These losses are money that could have been spent on improving existing public services, reducing taxes or to reduce government borrowing."
North West Norfolk MP James Wild, who is a member of the committee, said: "This scheme was set up at an incredible pace because we wanted to get money to businesses and a quarter of businesses took out these loans.
"That meant not all the checks that might ideally be put in place were put in place.
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"There are definitely lessons to be learned from this in terms of having the right checks in place in future and building in some of the counter-fraud measures from the get-go."
The issue was highlighted in January when Norfolk peer Lord Agnew of Oulton quit his role as Treasury and Cabinet Office minister for efficiency and transformation in protest at the way the loans were handled.
He described the Treasury's anti-fraud efforts as a "Dad's Army" operation when he appeared before the Public Accounts Committee last month.
Some 1.5m applications were approved by the Department for Business Energy and Industrial Strategy before the scheme closed in March 2021.
Money was loaned to small businesses by commercial lenders including high street banks.
But the government gave lenders a 100pc guarantee. The report adds: "In practice, this means that if the borrower does not repay the loan, government will."