The British Business Bank will be searching for a permanent chief executive, after interim head Catherine Lewis La Torre decided to not apply for the permanent position.
The news comes amid fierce criticism of the bank from Lord Agnew over losses relating to fraud and error of its emergency Covid loan scheme. He called for the board to be sacked, saying to a committee of MPs it had “presided over one of the most colossal cock-ups in recent government management.”
The Department for Business, Energy and Industrial Strategy, which owns the British Business Bank, believes £4.9bn could be lost in the £47.4bn bounce back scheme. The bank and its new chief executive will face the daunting task of recovering as much of that money as possible.
Lord Agnew’s criticism covered, in his words, the financial services agency’s inability to pressure banks into recovering loans to protect the taxpayer – a view contested by the board – and poor oversight of the bank by ministers.
The British Business Bank’s chief commercial officer, Patrick Magee, is also stepping down from his role this year but defended his employer’s handling of Covid loans, saying the scheme had to be set up at short notice and that they had shared concerns before being told to go ahead with it.
Hannah Barnard, the head of business banking at Barclays, claimed the government provided insufficient data to help them prevent fraudulent loans. She claimed HMRC didn’t provide up-to-date figures on company turnover – the measurement used to indicate how much a company could loan – meaning they had to rely on the word of the borrower.
Banks benefit from a 100 per cent state guarantee on their recovery efforts. Lord Agnew added they have a “huge moral obligation” to recover as much of these lost funds as possible, nevertheless.
In total, £79.3bn of interest-free Covid loans were handed out via three emergency schemes to help businesses struggling during the pandemic.
La Torre took over the position in September 2020 and will stay until the end of the year, according to the Financial Times. What is has not yet been established is whether she will be continuing in some capacity with the British Business Bank beyond that timeframe.
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