Greensill: £335m of taxpayer money at ‘increased risk’ due to ‘woefully inadequate checks’ on firm
Former prime minister David Cameron is reported to have earned $10 million (£7.2m) from his two-and-a-half years’ part-time work for Greensill Capital before it collapsed in March
Former Conservative prime minister David Cameron lobbied on behalf of the finance firm before its collapse earlier this year (Photo: Victoria Jones/PA Wire)
By Poppy Wood
November 20, 2021
Hundreds of millions of pounds of taxpayers’ money could be at risk due to failures by the Government-owned British Business Bank to properly scrutinise collapsed lender Greensill Capital, according to a new report.
The Public Accounts Committee (PAC) found that the Bank failed to carry out sufficient due diligence into Greensill, the finance firm that former prime minister David Cameron lobbied for, meaning that “up to £335m of taxpayer money is at increased risk”.
The committee questioned why the Bank was “insufficiently curious” about reports that implied Greensill was close to collapse and said checks on the lender were “woefully inadequate”.
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It also criticised the British Business Bank for striking the “wrong balance” between “making decisions quickly” during the pandemic and “protecting taxpayer interests”.
The British Business Bank approved Greensill as a lender for both the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) during the pandemic.
Greensill loaned £400m under CLBILS, the maximum it was permitted to lend, and £18.5m under CBILS.
But in March 2021, Greensill filed for insolvency. Its collapse triggered a series of investigations examining the financier’s close links with the Government and Mr Cameron.
The saga marked the first in a series of renewed calls to ban MPs and former politicians from lobbying, and cast a fresh spotlight onto the “revolving door” between politics and business.
According to BBC Panorama, leaked documents revealed that Mr Cameron earned $10 million (£7.2m) from his two-and-a-half years’ part-time work for Greensill before it collapsed.
The former Conservative prime minister reportedly made $4.5m after-tax when he cashed in Greensill shares in 2019. This was on top of his $1m-a-year salary as an adviser and a $700,000 bonus in 2019.
Earlier this year, it emerged that Mr Cameron sent a slew of WhatsApps, texts and emails to ministers, officials and the Bank of England in attempts to secure Greensill access to Government-backed Covid support schemes.
Mr Cameron has maintained that he did not know about the perilous financial state of the company when he lobbied for it to be given taxpayer support.
In its report published today, the PAC 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”.
Labour MP Dame Meg Hillier, chair of the PAC, said: “The British Business Bank only had to read the papers to be aware of serious questions about Greensill’s lending model, over-exposure to borrowers, and its ethical standards – yet it didn’t really start to delve into those issues until the problems were clear and hundreds of millions of taxpayers’ money was already at risk.
“It professed itself ‘very surprised’ to discover where these taxpayer-backed loans had gone on its watch, in contravention of its own lending and accreditation rules.”
The British Business Bank said: “The National Audit Office (NAO) concluded in July 2021 that the British Business Bank appropriately applied a streamlined version of its established process when it accredited Greensill Capital (UK) Limited as a lender under the Covid-19 business support schemes.
“Between March 2020 and March 2021, the British Business Bank accredited 116 CBILS lenders, 27 CLBILS (Coronavirus Large Business Interruption Loan Scheme) lenders and 28 BBLS (Bounce Bank Loan Scheme) lenders to provide essential access to finance for more than 1.6m businesses.
By Poppy Wood
November 20, 2021
Hundreds of millions of pounds of taxpayers’ money could be at risk due to failures by the Government-owned British Business Bank to properly scrutinise collapsed lender Greensill Capital, according to a new report.
The Public Accounts Committee (PAC) found that the Bank failed to carry out sufficient due diligence into Greensill, the finance firm that former prime minister David Cameron lobbied for, meaning that “up to £335m of taxpayer money is at increased risk”.
The committee questioned why the Bank was “insufficiently curious” about reports that implied Greensill was close to collapse and said checks on the lender were “woefully inadequate”.
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It also criticised the British Business Bank for striking the “wrong balance” between “making decisions quickly” during the pandemic and “protecting taxpayer interests”.
The British Business Bank approved Greensill as a lender for both the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) during the pandemic.
Greensill loaned £400m under CLBILS, the maximum it was permitted to lend, and £18.5m under CBILS.
But in March 2021, Greensill filed for insolvency. Its collapse triggered a series of investigations examining the financier’s close links with the Government and Mr Cameron.
The saga marked the first in a series of renewed calls to ban MPs and former politicians from lobbying, and cast a fresh spotlight onto the “revolving door” between politics and business.
According to BBC Panorama, leaked documents revealed that Mr Cameron earned $10 million (£7.2m) from his two-and-a-half years’ part-time work for Greensill before it collapsed.
The former Conservative prime minister reportedly made $4.5m after-tax when he cashed in Greensill shares in 2019. This was on top of his $1m-a-year salary as an adviser and a $700,000 bonus in 2019.
Earlier this year, it emerged that Mr Cameron sent a slew of WhatsApps, texts and emails to ministers, officials and the Bank of England in attempts to secure Greensill access to Government-backed Covid support schemes.
Mr Cameron has maintained that he did not know about the perilous financial state of the company when he lobbied for it to be given taxpayer support.
In its report published today, the PAC 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”.
Labour MP Dame Meg Hillier, chair of the PAC, said: “The British Business Bank only had to read the papers to be aware of serious questions about Greensill’s lending model, over-exposure to borrowers, and its ethical standards – yet it didn’t really start to delve into those issues until the problems were clear and hundreds of millions of taxpayers’ money was already at risk.
“It professed itself ‘very surprised’ to discover where these taxpayer-backed loans had gone on its watch, in contravention of its own lending and accreditation rules.”
The British Business Bank said: “The National Audit Office (NAO) concluded in July 2021 that the British Business Bank appropriately applied a streamlined version of its established process when it accredited Greensill Capital (UK) Limited as a lender under the Covid-19 business support schemes.
“Between March 2020 and March 2021, the British Business Bank accredited 116 CBILS lenders, 27 CLBILS (Coronavirus Large Business Interruption Loan Scheme) lenders and 28 BBLS (Bounce Bank Loan Scheme) lenders to provide essential access to finance for more than 1.6m businesses.
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“A less streamlined accreditation process would have meant fewer lenders would have been accredited and fewer businesses would have received the critical emergency finance they needed during the pandemic.
“The NAO also found that it was to the bank’s credit that its post-accreditation monitoring and audit processes picked up a potential issue quickly, as they were designed to do.
“The bank’s investigation into Greensill Capital’s potential breaches of the scheme rules for CLBILS is ongoing.”
A Government spokesperson said: “The government was not involved in the decision to accredit Greensill. The decision was taken independently by the British Business Bank, in accordance with their usual procedures.”
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