Scottish Daily Mail

£500m bill for bounce-back loans

- By Tom Witherow

MORE than 16,000 businesses that received bounce-back Covid loans have gone bust without paying the money back.

The mass insolvenci­es may have cost the taxpayer as much as £500million, a figure which will grow as more firms collapse.

The scheme was targeted by criminals because companies could selfcertif­y to claim the cash. Dozens of individual­s have been arrested, while more than 150 directors have been barred from running companies.

Last week, the business department revealed that firms collective­ly owing £3.2billion had fallen into arrears, while 61,475 loans were in default, potentiall­y costing the taxpayer £1.9billion. Official estimates showed that as much as £17billion of the £47billion loaned under the scheme will not be repaid.

The sum has led critics to turn on former chancellor Rishi Sunak, who has built his pitch to be prime minister on being fiscally responsibl­e.

Senior Tories labelled the approach to Covid handouts ‘shamefully negligent’. The latest figures, obtained by the BBC under freedom of informatio­n laws, were described as ‘shocking’ by a former head of the Serious Fraud Office Sir David Green.

He said: ‘You wouldn’t send an army into battle without assessing the risks.

And just the same in this situation, the risks, which were obvious, should have been assessed and addressed.’

There were 114,750 small firms in arrears on their loan repayments by the end of June, or one in 14 of the 1.5million loan recipients.

In March 2021 the Government estimated £4.9billion would be lost to fraud and error, but this had fallen to £3.5billion by March this year.

But the Government’s Taxpayer Protection Taskforce had only recovered £3.5million by November 2021 – just 0.2 per cent of its £1.5billion target.

Banks claimed to have prevented £2.2billion of fraud through pre-loan checks. Mr Sunak has said he was ‘proud of my record’ and that the amount firms are repaying has ‘far surpassed anyone’s expectatio­ns’.

‘Risks should have been assessed’

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