PAC’s report on Department for Business and Trade finds efforts to recover COVID bounceback loan fraud have been largely unsuccessful. A separate report on support for priority industries finds lack of clarity on how goals on economic growth and net zero are balanced by Govt.
Government has taken insufficient action to ensure that all entitled to compensation from the Post Office scandal have applied for it. In one of two new reports from the Public Accounts Committee (PAC) focused on the Department for Business and Trade (DBT), the PAC finds that many current and former postmasters affected by Horizon IT failings and associated miscarriages of justice are not yet receiving fair and timely compensation.
The PAC’s report finds that, based on figures provided by the Department in May 2025, only approx. one in five of letters sent to postmasters making them aware of one of the compensation schemes had been responded to. The 18,500 people written to by March ’25 as part of this scheme does not represent all those affected, and government has no plans for following up with people who are, or may be, eligible to claim under the schemes but who have not yet applied. DBT has not received any full claims under another of its schemes for those who had had convictions quashed by 2024 legislation; and for another scheme relating to convictions, 25 of 111 eligible people have not yet submitted a claim, some of which represent the most complex cases.
The report further finds that DBT’s efforts to recover fraud losses incurred through the Bounce Back Loan Scheme (BBLS) have been largely unsuccessful, with only a small fraction of losses recovered to date. DBT has estimated at least £1.9bn has been lost to fraud in the BBLS. The PAC’s inquiry found that DBT has recovered only £130m in payouts from lenders, though was unable to confirm how much of this amount relates to fraud. DBT has been too passive by placing primary responsibility on lenders to recover losses. As lenders’ losses are 100% underwritten by government, there is no commercial incentive to assist with recovery of taxpayers’ money. The highest risk fraud cases were being passed to the National Investigation Service (NATIS) to investigate, but recoveries by NATIS have been a minimal £8.6m.
With DBT further in the spotlight following recent developments in global trade and the UK steel industry, the PAC is also publishing a second, separate report on DBT’s support for priority industries. This report finds that, despite DBT being created to provide a front door to all businesses, it is not always clear which part of government businesses should go to with their needs, leading to confusion and at times conflicting or duplicated communications from departments.
The report further warns of a lack of clarity on how DBT balances multiple government objectives, such as economic growth, employment and net zero, when making decisions about supporting industry. This can make it difficult to understand government priorities, the rationale behind support, and for DBT to evaluate how effective that support is. Steel, for example, provides critical inputs into other sectors such as construction, manufacturing, and defence. Despite this, government policies, such as those designed to support decarbonisation, can put UK steel companies at a competitive disadvantage. The PAC is calling for greater transparency on the factors DBT considers when supporting industry.
Chair comment
Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said:
“The Post Office Horizon scandal was one of the UK’s worst ever miscarriages of justice. Thousands of people were failed deeply by the system. This Committee would have hoped to have found government laser-focused on ensuring all those eligible were fully and fairly compensated for what happened. It is deeply dissatisfactory to find these schemes still moving far too slowly, with no government plans to track down the majority of potential claimants who may not yet be aware of their proper entitlements. It is entirely unacceptable that those affected by this scandal, some of whom have had to go through the courts to clear their names, are being forced to relitigate their cases a second time.
“We found a similar passivity in government’s approach to recovering the almost £2bn of pounds in taxpayers’ money lost to Bounce Back loan fraud during the pandemic. DBT were unable to tell us if even the tiny fraction of that sum recovered was in fact even related to fraud. Indeed, relying on government-backed lenders to recover losses, who thus lack any incentive to pursue lost funds, has been a dangerously flatfooted approach. Now that the Insolvency Service has taken over responsibility for viable cases, we look forward to hearing how it fares where others have failed.
“Our report on supporting priority industries further finds that businesses can be faced with something of a confusing rabbit warren when seeking support from government. In an increasingly uncertain world for UK industry, we hope the recommendations in the two reports we publish today help DBT cement its place as the true front door for all business which it was designed to be.”
Further information
Read more on committees.parliament.uk
