Feb 8, 2023
Fraudulent Covid Loans Cost UK Taxpayers £640 Million
(Bloomberg) -- The UK has paid out £640 million ($774 million) to lenders against pandemic loans to small businesses now suspected of being fraudulent, the latest sign that the government failed to put effective measures in place to protect taxpayer money.
Lenders have flagged £1.1 billion of the £46.6 billion of Bounce Back Loan Scheme as suspected fraud as of the end of 2022, according to data released Tuesday by the British Business Bank. In total, the UK has so far paid out £4.1 billion to lenders to cover defaulting loans from the program, just under 9% of the total.
Some £77 billion was lent across three government-guaranteed programs established in the first half of 2020 to support UK businesses impacted by the pandemic. The government guaranteed 100% of loans extended in the Bounce Back Loan Scheme, which was intended to enable smaller businesses to access finance more quickly during the coronavirus outbreak.
The Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme, which targeted larger companies and received 80% guarantees from the UK, are showing much lower levels of fraud. About 0.15% of CBILS facilities identified as suspected fraud by lenders and zero for CLBILS.
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