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 announced its sponsorship of the “Innovation and Sustainable Technology Solutions Competition (GU - IST Solutions), hosted by Gulf University at its main campus.
This strategic sponsorship reflects BENEFIT’s active role in advancing technological innovation and fostering sustainable solutions to future challenges. It also seeks to empower Bahraini youth by enhancing their skills, capabilities, and competitiveness in innovation and solution development—contributing meaningfully to the broader goals of sustainable development across all sectors.
As part of BENEFIT’s active involvement in the competition, the company has announced that Hanan Abdulla Hasan, Senior Manager of Public Relations and Communication, will serve on the competition’s supervisory committee. Her upcoming participation reflects BENEFIT’s forward-looking commitment to championing academic and professional excellence.
Commenting on the occasion, Hanan Abdulla Hasan, Senior Manager of Public Relations and Communication at BENEFIT, said, “We are privileged to support this pioneering initiative, which aligns seamlessly with BENEFIT’s enduring commitment to fostering innovation and nurturing the potential of Bahrain’s youth. Our participation is rooted in a deep sense of social responsibility and a firm belief in the pivotal role of innovation in shaping a sustainable future. Through such platforms, we seek to empower the next generation with the knowledge, skills, and foresight required to develop impactful solutions that address future challenges, in line with the United Nations Sustainable Development Goals 2030.”
Dr. Aseel Al Ayash Dean of the College of Engineering in Gulf University commented, “We extend our sincere gratitude to BENEFIT for their generous sponsorship and support of the Innovation and Sustainable Technology Solutions Competition. This contribution plays an instrumental role in helping us achieve the strategic goals of this initiative, namely, cultivating a culture of innovation and sustainability, encouraging efforts that address the imperatives of sustainable development, and enhancing the practical and professional capabilities of our students and participants.”
The event will bring together a diverse spectrum of participants, including secondary school students, university undergraduates, engineers, industry professionals, entrepreneurs, academic researchers, and subject matter experts representing a wide range of disciplines.
The competition seeks to inspire participants to develop and present innovative, sustainable technologies aimed at addressing pressing environmental, social, and economic challenges. It encourages the formulation of business models that integrate advanced technological solutions with core principles of sustainability. Moreover, it serves as a platform for emerging leaders, entrepreneurs, and innovators to contribute to the advancement of the Sustainable Development Goals, promote the ethos of responsible technology, and demonstrate its transformative potential across various sectors.
Attendees will have the opportunity to view a series of project presentations submitted by participants, covering diverse areas such as eco-friendly product design, smart and sustainable innovations, renewable energy technologies, water conservation and management, waste minimisation and recycling, green architectural solutions, and sustainable transportation systems. Outstanding projects will be formally recognised and awarded at the conclusion of the event.