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Job support and business loan schemes

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In response to the Public Accounts Committee’s 23rd report (bounce back loan scheme) and 34th report (support for jobs) from the 2019/21 parliamentary session, the government says that it agrees with the majority of the recommendations made by the committee. Particular points of interest are in relation to the covid job-support schemes and the bounce back loan scheme.

On covid job support, in accordance with the committee’s recommendations, the government makes a number of commitments, including:

  • setting out in writing by May 2021 how government departments will ensure lessons learned from working closely together during the pandemic, for example by implementing the support schemes at great speed, will be retained rather than lost;
  • confirming (again by May 2021) findings from a review of other countries’ self-employed systems and any proposals to apply these findings in the development of the MTD programme;
  •  improving data collection from the information it already holds to better estimate the levels of fraud within the job retention scheme and set out steps to be taken to recover fraudulent job support scheme grants; and
  • providing clarity around the employment support arrangements that will be available for UK nations, regions and businesses under conditions of national lockdown, regional lockdown and easing of restrictions for the remainder of the covid-19 pandemic.

On bounce back loans, the government will:

  • use all available data when implementing new business support schemes to develop scenario-based analysis of most likely outcomes and use this to minimise taxpayer risk; and
  • balance providing immediate business support with the need to protect taxpayer money, for the remainder of the bounce back loan scheme, including assessing the effectiveness of self-certification for the scheme.

It is worth noting that the government disagrees with the following two committee recommendations in relation to the bounce back loan scheme:

  • before launching or renewing a scheme, the Treasury should provide clarity on the level of losses it is likely to entail and the evidence on which this analysis is based. the government considers the degree of uncertainty too great to provide a statement on the relative balance of likely costs and benefits.
  • provide clear updates on dealing with different cases of fraud, including how to prioritise recovery and prosecution. the government does not intend to make public the detail of its approach to recovery and prosecution in different fraud cases, given this could inadvertently undermine the effectiveness of counter-fraud measures by tipping off criminals.
Issue: 1521
Categories: News