Britain’s biggest banks have repeatedly warned the Treasury of compromises under the scheme: despite being under pressure to ensure rescue funds get to businesses quickly, lenders knew that providing money quickly would mean fewer fraud checks on applicants.
A spokesman for industry group UK Finance said: “Lenders have worked closely with the government and the British Business Bank to detect and prevent fraudulent activity, including using a dedicated platform to prevent claims being made. two fold.”
Mark Mullen, chief executive of Atom Bank, said he had decided not to get involved in BBLS lending over fears it would undermine lending standards.
Instead, it has used separate government schemes to continue providing £746m loans to businesses amid Covid. Mullen maintains that his bank has had no cases of fraud.
“We believe that knowing the customers and underwriting loans according to clear criteria protects both the lender – in this case, the taxpayers – and actually the legitimate borrowers,” he said.
“Under BBLS these controls have been removed. There was a clear rush to minimize the scars to the UK economy and support legitimate businesses in the face of the pandemic, but it had predictable consequences.”
Following Lord Agnew’s resignation, the government is set to come under renewed scrutiny.
Sarah Munby, the business department’s permanent secretary, is set to be asked about the issue at a hearing in late February, while the Public Accounts Committee (PAC) may devote a session to review the department’s annual report to questions about the BBLS. Lord Agnew may also be asked to submit written evidence to the PAC.
Chair Dame Meg Hillier said: “We pushed for this program to be fast, but we didn’t push for there not being basic controls in place.
“We were really flabbergasted by the level of fraud. It’s almost like the government has just accepted it. We’re saying, you can’t just feel like everything’s fine.
“We’re not letting this one go, we’re very concerned as a fraud committee. With this one in particular, the problem is the egregious nature of some of the fraud attempts – and the fact that 61% of loans had been pulled from the gate before they brought a check for duplicate loans.We want to see more enforcement.
Regarding Brogan, a spokesman for Lloyd’s – parent company of the Bank of Scotland – said the lender “has thoroughly investigated the exact circumstances of his rare case and has contacted him to apologize for any distress and inconvenience caused.
“It is important to note in this case that while the fraudster was able to apply for a loan on behalf of our client, he was unable to access any of the funds as the bank account itself was not compromised in any way. moment.”
A UK Treasury spokesman said: ‘Fraud is completely unacceptable, and we are taking action on multiple fronts to crack down on anyone who has sought to exploit our schemes and bring them to justice.’
But by already writing off billions, it seems the government has already dug itself a hole.