The government faces £35 billion of losses on its taxpayer-backed emergency loans as hundreds of thousands of small businesses default, the Office for Budget Responsibility estimates.
In its worst case scenario, the OBR expects the state to lose £3 for every £5 lent under the Bounce Back scheme, which provides blanket guarantees on loans of up to £50,000. Even in its central scenario, Bounce Back creditors will fail to repay £3 for every £10 borrowed and account for 95 per cent of all loan defaults by value.
The figures in the OBR’s Fiscal Sustainability Report reveal both the risk to the exchequer of the emergency schemes and the repayment burden the private sector faces.
The OBR is an independent body with a mandate to provide