According to the National Audit Office (NAO), fraudsters heavily exploited the Covid Bounce Back Loan scheme, implemented by the Government to help small and medium-sized businesses survive the impact of lockdown restrictions. The project cost roughly £47 billion, with fraudsters pocketing £4.9 billion, or 11% of the total figure. RT has the story.
Established during the pandemic, the scheme offered loans of up to £50,000 to small and medium-sized businesses to help them cope with and recover from the pandemic. Having now closed, it handed out 1.5 million loans to a quarter of U.K. businesses, totalling around £47 billion.
An investigation by the NAO has discovered that “high levels of estimated fraud” was carried out by criminals after anti-fraud measures were “implemented too slowly“.
Out of the loans handed out, 11% have been deemed to be fraudulent, as of March, costing the U.K. Government nearly £4.9 billion.
“The true level of fraud will become clearer over time,” Gareth Davies, the head of the NAO, stated, adding “it is clear Government needs to improve on its identification, quantification and recovery of fraudulent loans within the scheme“.
The NAO’s assessment warns the U.K. Government that more than a third of the loans, valued at £17 billion, might never be repaid due to both a combination of criminals fraudulently claiming money and businesses defaulting on their debt.
Worth reading in full.