Why Covid loan transparency matters

28 November, 2022 | 2 minute read

Over the next three days, Spotlight on Corruption will be challenging the Information Commissioner’s decision not to release the names of companies who received government-backed loans from the British Business Bank’s (BBB) Covid-19 loan schemes. But why does public access to this data matter? Why should the names have been released back in 2020 – and what good could having that information do now?

It should not be controversial to say that decisions about how UK authorities allocate billions of pounds of taxpayers’ money should be open to scrutiny whenever possible. The BBB’s loan schemes were an important measure that helped to save businesses and jobs during the pandemic. But concerns were raised at the time – and by a series of parliamentary committees since – that not enough was done to tackle fraud and protect public funds.

In May 2020, the BBB raised concerns with the Government about the Bounce Back Loan Scheme, which was known to carry a very high risk of fraud, but was instructed to press ahead. Finding out who these loans went to – and remember, we asked for the names of companies, not individuals – is an essential part of holding the BBB, the Government and the banks to account. Indeed, if these names had been published back in 2020, as we and other civil society organisations requested, these losses to fraud could have been avoided. 

And this was a vast amount of public money. The 2021/2022 Annual Report from the Department for Business, Energy & Industrial Strategy (BEIS), released in October, states that a reasonable estimate of fraud in the Bounce Back Loan Scheme is 12% of what was lent. This equates to £5.6 billion. This is money that could have been invested in public services, had it not found its way into the pockets of fraudsters because of major failures across the board to ensure sufficient anti-fraud measures were in place. Opening that data up to public scrutiny – and to analysis by the media, civil society and others – would support the Government’s so-far limited success in recovering losses from fraud in the schemes.

Learning lessons

Of course, it is only by studying the failures of these kinds of schemes that we can learn the lessons for next time. Since the pandemic, we have already seen major Government interventions to protect the public from increases in energy costs. Given the headwinds faced by the UK economy, it would be unwise to believe that similar schemes may not be required in the future. Undertaking a full accounting of the BBB loan schemes by publishing this data not only helps the Government to learn important lessons for any future schemes in terms of the management of fraud, data, state aid and the allocation of public funds, but it also stands as a warning to those who might seek to abuse future schemes for their own gain.

Fundamentally, when it comes to spending public money, this kind of secrecy is toxic. If taxpayers can’t see how their money has been spent, it undermines their faith in Government. At Spotlight, we believe that transparency and accountability are essential.

Click here to read our full briefing on the tribunal. You can also read our skeleton argument and witness statements from George Havenhand and David Clarke.

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