A new report by the Public Accounts Committee sheds light on the Government’s Bounce Back Loan Scheme, with applicants self-certifying and not subject to credit checks

Evidence that the Chancellor’s £42.2 billion loan scheme to help bail-out small businesses hit by COVID-19 is leading to fraud has been provided to MPs.

A new report by the Commons’ Public Accounts Committee published today states that the first estimates that fraud and failure to repay the money could total between £15 billion and £26 billion could now be even higher.

In April, the Government launched the Bounce Back Loan Scheme, promising loans of up to £50,000 within 24 to 72 hours, self-certified by the applicant, involving no credit checks. The loans have been mainly paid out by the big banks, indemnified by the Government if the money was not paid back. The scheme has now been extended to the end of January 2021 following the second wave of the Coronavirus pandemic.

The spending watchdog, the National Audit Office, first raised the question of fraud in October. Now the Association of Accounting Technicians (AAT) – which provide services to 400,000 businesses – has provided evidence.

“A client in the process of becoming insolvent obtained a loan using the scheme in the knowledge they will not be paying it back,” it cites. “This is clearly fraudulent, unethical and illegal. It is behaviour that should be punished and taxpayer’s money that should be repaid in full.

“More commonly, AAT-licensed members have advised their clients that they are not eligible for BBLS [Bounce Back Loan Scheme] but subsequently discovered the same clients have successfully claimed. This strongly indicates they have obtained the funds fraudulently. The Association have been urging worried accountants to contact the HM Revenue and Customs fraud hotline. But their members have found that ‘the HMRC fraud hotline has been inundated with calls and is also short-staffed’. Given the scale of the problem, staff shortages are something that should be urgently addressed.”

The MPs state in the report that the scheme was launched at short notice with no business case and that the Treasury has no plans in place to find out how the money was spent – or how fraudulently-claimed cash will be recovered.

Labour MP Meg Hillier, the committee’s chair, said: “Rushing to get money out of the door after the fact didn’t allow for analysis of how many businesses needed this help, could benefit from it, or could repay it. Dropping the most basic checks was a huge issue that puts the taxpayer at risk to the tune of billions.”


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