We previously reported on HMRC taking an active interest in pursuing COVID loan fraud. The British Business Bank ("BBB") is now following suit. The BBB has engaged the services of PwC to analyse COVID loans claimed and paid out.
The BBB is responsible for overseeing the emergency government-backed lending programmes established in the wake of COVID-19. These programmes include the Bounce Back Loan Scheme, where £43.5 billion has been claimed, and the Coronavirus Business Interruption Loan Scheme. These loans are provided by high street banks and guaranteed by the government, so the taxpayer picks up the tab in the event that the borrower cannot repay the loan.
Under the COVID loan schemes the BBB has lent around £68 billion, and with the initiatives extended to March 2021 this figure is set to rise. The National Audit Office estimated in October 2020 that the government faced a potential loss of £15 billion to £26 billion through businesses not being able to repay the loans and fraud. At that time the BBB's CEO, Catherine Lewis La Torre, confirmed that fraudulent loan applications had been valued at £1.1 billon.
A spokesperson for the BBB announced that they have “…recently appointed PwC as consultants to provide further insight into where fraud is being committed or attempted, helping to identify where further resources are required as well as enabling additional fraud-prevention measures to be put in place.”
Going forward, there will be weekly meetings between the BBB, banking executives and Cifas, a not-for-profit organisation working to reduce and prevent fraud and financial crime in the UK.