The UK government is facing a potential loss of £15bn to £26bn through businesses not being able to repay loans taken out to support them during the Covid-19 pandemic.

The National Audit Office — the government’s spending watchdog — published the projection as part of an investigation of the financial impact of the Bounce Back Loan Scheme, published on 7 October. The scheme, introduced in May, offers 100%-government backed loans of up to £50,000 to small businesses to cope with the impact of the virus.