US EditionGovernment branded ‘dangerously flat-footed’ in recovering £1.9bn of Covid loan losses
- The UK Government has come under criticism for its failure to recover almost £2 billion in loans suspected to be fraudulent, distributed under the pandemic-era financial support scheme launched five years ago.
- The scheme, introduced at the start of the pandemic, quickly provided 1.5 million loans of up to £50,000 to businesses by bypassing the usual creditworthiness and financial background evaluations to support those affected by mandatory closures.
- Despite an estimated £1.9 billion total loss to fraud, only about £130 million has been recovered, with government-backed lenders lacking incentive to pursue repayments and being guaranteed coverage of losses.
- Sir Geoffrey Clifton-Brown, committee chairman, condemned Government's 'passivity' and reliance on lenders, while Starling Bank recently removed guarantees on problematic loans, setting aside £28 million.
- Responsibility for pursuing viable Covid loan recovery cases has been passed to the Insolvency Service, with continued cooperation planned between government bodies, law enforcement, and industry stakeholders to combat fraud related to the pandemic support schemes.
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Covid fraud recovery 'largely unsuccessful', says MPs
standfirst: The Public Accounts Committee (PAC) has said the government’s attempts to recover at least £1.9bn thought to be lost to fraud during pandemic have been ‘largely unsuccessful’Since the pandemic countless business directors have been caught up with for falsifying their turnovers, fictionalising businesses completely, and applying for more loans than they were entitled to.Business directors were given 10 years to pay the loans back, but…
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Leaning Left5Leaning Right0Center1Last UpdatedBias Distribution83% Left
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