It’s estimated that as much as £17 billion of the £47 billion that the government spent on the bounce-back loans to support businesses during the pandemic will never be paid back.

The UK government lost £4.9 billion it spent on bounce-back loans to fraud, and it’s estimated that as much as £17 billion of the £47 billion that the government spent on the bounce-back loans to support businesses during the pandemic will never be paid back.

The shocking figures were revealed by the Times, and it’s emerged that border guards have also seized suitcases of cash from the bounce-back loan programme, as people tried to smuggle the cash out of the country.

The Times reports: “Other recipients of financial support during the pandemic used the money to fund gambling sprees, home improvements, cars and watches, it has emerged”.

The chancellor Rishi Sunak has announced the launch of a new £25 million fraud squad to claw back some of the money that’s been lost.

The Government says the new body will make use of data analytics experts and economic crime investigators to recover the money.

Sunak said: “We will chase down fraudsters who rip off the taxpayer.

“This elite fraud squad, backed by £25 million, will ensure the latest counter fraud techniques are being used to track down these criminals.”

The bounce back scheme was put in place by the government to help support small businesses during the pandemic. Businesses could apply for loans of up to £50,000 based on their turnover, which they self-declared.  The money is paid back over six years at a fixed rate of 2.5 per cent.

The interest for the first year was covered by the government.

A fraud expert told the Times that the findings were just the tip of the iceberg, with the sheer volume of abuse and fraud meaning that most of those responsible were ‘unlikely to face any major sanction’.

Basit Mahmood is editor of Left Foot Forward

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