£500m Covid loans lost
UP to £500million in Governmentbacked Bounce Back Loans was given to firms that then went bust.
The Insolvency Service said 9,733 businesses had stopped trading or went into administration after receiving cash supposed to help them through the pandemic.
The details come after Anti-Fraud Minister Lord Agnew of Oulton quit on Monday over Government failings to stop fraudulent abuse of the Covid schemes.
Bounce Back Loans were launched in May 2020 to give firms funds to cover trade lost during lockdown. Businesses could apply for up to £50,000, or a maximum of 25% of their annual turnover.
Banks, which were told to act quickly, provided the cash while the Government gave them a 100% guarantee to cover losses.
But banks’ checks applicants were minimal.
A total of £47.4billion was provided through 1.6 million loans.
A Government spokesman said: “Our priority was to protect jobs and livelihoods, which is why we acted quickly. Businesses are rightly expected to make every effort to repay their loans, and the majority of payments are being made.”
Lord Agnew accused the government of “schoolboy errors” and lacking interest in the huge sums gone missing. Earlier this month the
wrote off £4.3bn stolen from Covid schemes including furlough.
But after Lord Agnew’s resignation, Chancellor Rishi Sunak said all fraud would be investigated.
Lord Agnew said: “If it happens then events of the last week will have been worthwhile. However, we await the detail. Who will do this work?