THE government failed to put adequate measures in place to prevent fraudsters stealing billions through its Bounce Back Loan scheme to businesses, the National Audit Office (NAO) has said reports the BBC.

Counter-fraud activity was “implemented too slowly”, which resulted in “high levels of estimated fraud”, it said.

It added the Department for Business estimated fraudulent loans were worth £4.9bn, 11% of the total, as of March.

The government said it would “not tolerate” people defrauding taxpayers.

The Bounce Bank Loan scheme was set up in April 2020 with the aim of keeping afloat small firms struggling due to the coronavirus pandemic.

A total of 1.5 million loans worth £47bn were issued through the initiative, after about a quarter of UK businesses applied.

In its report, the NAO said the government estimated more than a third of loans, worth £17bn, may never be repaid due to both fraudulent activity and legitimate borrowers defaulting.

As of 30 September, figures from the state-owned British Business Bank, which supervises the scheme, showed £2bn worth of loans had been repaid and £1.3bn had been defaulted on. The bank said about 7% of all loans were at least one month in arrears.

But the spending watchdog said predicted losses through both fraud and businesses being unable to pay were “highly uncertain”.

Gareth Davies, the head of the NAO, said: “The true level of fraud will become clearer over time.”

Mr Davies said the government prioritised loans to small businesses quickly but “failed” to put adequate fraud prevention measures in place.

“It is clear government needs to improve on its identification, quantification and recovery of fraudulent loans within the scheme,” he added.

Full story below.

https://www.bbc.co.uk/news/business-59504943