Watchdog says UK government fails to guard against Covid loan fraud
December 4, 2021, 7:16 am

Watchdog says UK government fails to guard against Covid loan fraud

England-London-Westminster-Westminster bridge/Pixabay

The Guardian reported a watchdog has said, the UK government failed to guard properly against fraud in its £47bn Covid emergency lending programme for small businesses, opening itself up to billions of pounds of losses.

The National Audit Office, which scrutinises public-sector spending, said that bounce-back loan scheme launched in May 2020 and did not include credit checks or fully verify the identity of small businesses applying for loans.

“Government prioritised getting bounce-back loans to small businesses quickly but failed to put adequate fraud prevention measures in place,” said Gareth Davies, the NAO’s comptroller and auditor general. “One impact of these decisions is apparent in the high levels of estimated fraud.”

England-Thames river-London-Aerial View/Pixabay

The government launched the scheme at the start of the pandemic to stop the collapse of small businesses.

Firms could borrow up to £50,000 or or a maximum of 25% of annual turnover from accredited banks. About a quarter of UK businesses applied to the scheme, and 1.5m bounce-back loans – which were 100% guaranteed by the government – worth £47bn were made.

In March, Britain’s business ministry, which ran the programme via the British Business Bank, a state lender, estimated that 37% of the loans would not be repaid and that 11% came from fraudulent applications.

A subsequent investigation by the accountancy firm PwC in October revised the fraud rate down to 7.5%, although the NAO said it had not had time to check this estimate itself.

Other countries are also investigating the misuse of emergency loans issued during the pandemic.

Meg Hillier, the Labour chair of the cross-party public accounts committee, said the government had done too little to reduce “colossal risks of fraud and error”.

She added: “It’s now focusing on recovering money from organised crime, yet many of the smaller-scale fraudsters will have slipped through its fingers."

A spokesperson said, the business ministry said loans and other support had helped millions of firms avoid laying off staff. “We are working closely with lenders and enforcement authorities to minimise fraud and ensure those that have committed fraud face consequences."

Source: theguardian

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, has sponsored the BuildHer CityHack 2025 Hackathon, a two-day event spearheaded by the College of Engineering and Technology at the Royal University for Women (RUW).
Aimed at secondary school students, the event brought together a distinguished group of academic professionals and technology experts to mentor and inspire young participants.
More than 100 high school students from across the Kingdom of Bahrain took part in the hackathon, which featured an intensive programme of training workshops and hands-on sessions. These activities were tailored to enhance participants’ critical thinking, collaborative problem-solving, and team-building capabilities, while also encouraging the development of practical and sustainable solutions to contemporary challenges using modern technological tools.
BENEFIT’s Chief Executive Mr. Abdulwahed AlJanahi, commented: “Our support for this educational hackathon reflects our long-term strategic vision to nurture the talents of emerging national youth and empower the next generation of accomplished female leaders in technology. By fostering creativity and innovation, we aim to contribute meaningfully to Bahrain’s comprehensive development goals and align with the aspirations outlined in the Kingdom’s Vision 2030—an ambition in which BENEFIT plays a central role.”
Professor Riyadh Yousif Hamzah, President of the Royal University for Women, commented: “This initiative reflects our commitment to advancing women in STEM fields. We're cultivating a generation of creative, solution-driven female leaders who will drive national development. Our partnership with BENEFIT exemplifies the powerful synergy between academia and private sector in supporting educational innovation.”
Hanan Abdulla Hasan, Senior Manager, PR & Communication at BENEFIT, said: “We are honoured to collaborate with RUW in supporting this remarkable technology-focused event. It highlights our commitment to social responsibility, and our ongoing efforts to enhance the digital and innovation capabilities of young Bahraini women and foster their ability to harness technological tools in the service of a smarter, more sustainable future.”
For his part, Dr. Humam ElAgha, Acting Dean of the College of Engineering and Technology at the University, said: “BuildHer CityHack 2025 embodies our hands-on approach to education. By tackling real-world problems through creative thinking and sustainable solutions, we're preparing women to thrive in the knowledge economy – a cornerstone of the University's vision.”