A committee of MPs have recently found that almost £400mn of taxpayer money is at increased risk due to a failure to conduct sufficient checks on the now-collapsed Greensill Capital, a firm for which former prime minister David Cameron lobbied. In a new report by the House of Commons’ Public Accounts Committee (PAC), the group of MPs have scrutinised a decision to allow the firm to be a lender under government-backed Covid support schemes.
The government-owned British Business Bank approved Greensill as a lender for both the Coronavirus Business Interruption Loan Scheme (CBILS), as well as the Coronavirus Large Business Interruption Loan Scheme (CLBILS). It went on to loan £400m under CLBILS, and £18.5m under CBILS. However, it went on to file for insolvency in March this year. In their report, the PAC found that “up to £335m of taxpayer money is at increased risk following the British Business Bank’s failure to conduct sufficient due diligence” into Greensill.
The MPs concluded that the Bank’s “approach to due diligence in accrediting Greensill was woefully inadequate” and criticised the Bank for striking the “wrong balance” between “making decisions quickly” during the pandemic and “protecting taxpayer interests.”
The report added, “In the case of Greensill, the Bank was insufficiently curious about media reports questioning Greensill’s lending model, its over-exposure to borrowers, and ethical standards until problems were clear and hundreds of millions of taxpayers’ money left exposed.” It also found that “a lack of information-sharing across government” had “once again hampered sound decision-making in government’s response to the pandemic and allowed Greensill access to taxpayer-funded schemes.”
The PAC also said that the government had “not yet identified the broader lessons from its accreditation of Greensill or from its Covid-19 business support schemes” and added it was “essential that these lessons are identified.” The MPs went on to say that it had been “insufficiently curious when identifying where money lent through the schemes, including by Greensill, has ultimately gone.”
They called on the Bank to review its accreditation process, and the Treasury, and the Department for Business, Energy and Industrial Strategy to publish a “full lessons-learned report” by July next year.
