UK taxpayers face losses on covid loans
Losses in the billions - but may be less than expected
UK taxpayers are facing a loss of about £5 billion from fraudsters who have abused the minimal checks on the government’s Covid-19 bounce back emergency loan scheme.
The bounce back loan scheme, rushed out by the government last year to try to support hundreds of thousands of smaller businesses at risk of collapse due to coronavirus restrictions, permitted banks to offer government-guaranteed loans of up to £50,000. This left the UK taxpayer to pick up the tab for any unpaid loans.
In total, £46.3 billion has now been lent to over 1.1 million businesses through either the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS), or the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Expected losses are still lower than initially expected, and last year’s official estimates indicate that government lending plans for businesses during the coronavirus crisis could cost taxpayers £ 18-26 billion.
