British taxpayers are facing a staggering £1.1 billion black hole from Rishi Sunak's flagship pandemic rescue scheme for startups, according to a devastating National Audit Office report.
The Future Fund, launched in May 2020 as the then-chancellor's response to the COVID crisis, has seen 158 supported companies collapse into administration while hundreds more struggle to repay government loans.
Taxpayer Millions Written Off
Of the £1.14 billion pumped into 1,190 companies through convertible loans, only £3.6 million has been recovered to date. The NAO warns the final loss to the public purse will likely exceed £1 billion once all failed investments are accounted for.
"The fundamental problem is the government is a minority investor in these companies without any say in how they're run," explains Meg Hillier MP, chair of the public accounts committee. "Taxpayers are last in line when things go wrong."
Due Diligence Concerns Raised
The report reveals alarming gaps in the scheme's oversight. The British Business Bank, which administered the fund, conducted no independent checks on company valuations and relied entirely on self-certification from investors.
This allowed some companies to receive massive taxpayer backing despite questionable prospects:
- £5 million went to a company with just £33,000 revenue
- Several recipients had never filed accounts
- Minimal checks on company viability or investor track records
Sunak's Legacy Under Scrutiny
The Future Fund was personally championed by Sunak during his time as chancellor, touted as essential support for innovative businesses during the pandemic. However, the scheme's disastrous performance now raises serious questions about its design and oversight.
With 65% of the portfolio still held in companies that haven't yet exited, taxpayers face further potential losses. The Department for Business and Trade maintains the fund achieved its primary objective of supporting companies through the crisis, but opposition parties call it "a colossal waste of public money."
As the final bill continues to mount, the Future Fund serves as a costly lesson in the risks of government venture capital—with British taxpayers footing the bill.
