THE government is “re-evaluating” its approach to recovering debt owed by businesses that received financial assistance during the pandemic, according to the Treasury Minister – after it emerged that around £5 million in overclaimed support was still outstanding.
Deputy Elaine Millar said that ministers were looking to ensure those with outstanding debts “are actively engaged on an affordable repayment plan”.
The amount of overclaimed support yet to be recovered – years after various financial support packages were rolled out by the government at the height of the pandemic – was revealed within the latest update from the Comptroller and Auditor General, Lynn Pamment.
Businesses were able to apply for support through initiatives such as the Co-funded Payroll Scheme, as the government sought to mitigate the impact of public health measures on the Island’s economy.
However, as Ms Pamment noted in her report, around £12.6m in overclaimed support was later identified across the schemes that were introduced.
The government has since been recovering the debt, which stood at less than £7m this time last year. Ms Pamment wrote: “Levels of identified overclaims of financial support from government increased during the Covid-19 pandemic with the introduction of new schemes to provide support for businesses and individuals.”
The report stated that, at the end of September 2024, £5m had yet to be recovered.
The bulk of the outstanding debt (£4,787,271) stemmed from the co-funded payroll scheme, while the fixed-cost support scheme and visitor accommodation support scheme accounted for £11,000 and £177,296 respectively.
Deputy Millar said: “Due to the ongoing challenges experienced by businesses in response to the pandemic, the previous government adopted a more flexible approach to debt recovery for those that had overclaimed from Covid economic support schemes.
“This included extended repayment terms and not pursuing debts in court, to prevent undermining the success of the economic support schemes in keeping businesses trading.”
She continued: “This policy was continued to help with the cost-of-living pressures that followed. Now that rates of inflation are forecast to decline and the businesses have had time to recover from the financial stresses of the pandemic, ministers are re-evaluating the approach to recovery of this debt with a view to ensuring those with outstanding debts are actively engaged on an affordable repayment plan.”
