London [UK], April 28: The British government was accused by a powerful committee Wednesday of being complacent about billions of dollars lost to fraud in a scheme set up to help businesses survive the COVID-19 pandemic.
The House of Commons' Public Accounts Committee said in a report that the latest estimates show that of 47 billion pounds (59 billion U.S. dollars) paid out in the taxpayer-backed Bounce Back Loan Scheme, 17 billion pounds were expected to be lost.
Of that total, 4.9 billion pounds, over 10 percent of the loans, would be lost to fraud, the report added.
Business survival has come at a staggering cost to the taxpayer, the committee said, when this money could have been spent on improving existing public services, and reducing taxes and government borrowing.
Meg Hillier, chair of the committee, said it was unpleasantly surprised to find how little the government had learned from the 2008 banking crisis, "and even now we are not at all confident that these hard lessons will be embedded for future emergencies."
In the report, the committee has accused the government's Department for Business Energy and Industrial Strategy (BEIS) of being complacent in preventing fraud.
The committee said it had previously warned in December 2020 that the design of the business loan scheme exposed the taxpayer to potentially huge losses.
The focus on the delivery of the loans at "breakneck speed," meant lenders were not required to carry out credit or affordability checks, or even verify application information. To offset the risk to lenders, the government's 100 percent guarantee meant that if the borrower did not repay the loan, the taxpayer would foot the bill.
"With weary inevitability we see a government department using the speed and scale of its response to the pandemic as an excuse for complacent disregard for the cost to the taxpayer," Hillier said.
"More than two years on, BEIS has no long-term plans to chase overdue debt and is not focused on lower-level fraudsters who may well just walk away with billions of pounds of taxpayers' money," she added.
Source: Xinhua
