MPs have slammed Britain’s business department for huge losses on two Covid-19 support schemes, delays in compensating victims of the Post Office software scandal and “inaccuracies” in the Companies House register.

The House of Commons’ public accounts committee on Wednesday noted that the scale of fraud and error in two pandemic assistance programmes in just one year was £2.2bn.

These were on “coronavirus grant funding” given to local councils to support small and medium businesses in England during lockdown, and the “bounceback” loans made to struggling businesses.

The government believes it could end up losing £4.5bn of taxpayers’ money through the £47bn bounceback loan scheme (BBLS) alone.

The estimate excludes the billions of pounds lost on support administered by other departments during the pandemic, such as the “furlough” job retention programme run by the Treasury.

The MPs concluded that the business department’s “lack of curiosity” about the bounceback scheme increased the risk of losses for taxpayers.

The report found that the department had responded “too late” to problems with the loan scheme, having failed to liaise with the Cabinet Office counter-fraud function until well after the policy had launched.

The MPs also said the business department had handed out £25bn of Covid-19 business support grants through local authorities, of which £985mn out of the first tranche of £11.7bn were made “in error”.

“The department believes that it will not recoup the majority of this, given there was not deliberate fraud and the businesses were generally struggling due to Covid,” the report found.

Meg Hillier, Labour MP and the committee’s chair, said: “At a time of financial crisis the department for business has lost billions of taxpayers’ desperately needed funds.

“It shows no real signs of making the improvements that would prevent the big mistakes . . . happening all over again.”

The MP also criticised the business department for moving “too slowly” to compensate people over the Post Office computer scandal. Between 2000 and 2013 faults in the Horizon system led to hundreds of employees being wrongly prosecuted for theft.

The High Court ruled in 2019 that the Post Office system contained “bugs, errors and defects” that caused financial discrepancies in thousands of postmasters’ branch accounts.

The government set up a public inquiry and has promised £579mn to the Post Office for compensation.

The MPs acknowledged that 90 per cent of compensation “offers” had been made by mid-November. But it also cited media reports of some victims receiving only partial payments and being owed large sums.

The committee separately criticised the register of companies run by Companies House, overseen by the business department.

The MPs said that although making a false declaration to Companies House had been a criminal act since 2006 there was only one recorded conviction for this offence, in 2018.

“Years of slogans about Britain being open for business are undermined by a dysfunctional company registration system that gives no confidence either in the proper operation of business and VAT systems, or that it will help to prevent the fraud, now the biggest crime in the country,” said Hillier.

The Department for Business and Trade said: “Our Covid-19 loan schemes provided a lifeline to almost 1.7mn businesses across the UK and protected up to 2.9mn jobs.” It noted that £5.1bn of bounceback loans had been fully repaid, and £24bn worth were being repaid on schedule.

“On the Horizon Post Office scandal, we have been clear that compensation should be delivered to victims swiftly. Over £18mn has been paid to postmasters with overturned historical convictions, and through the Historical Shortfall Scheme over 99 per cent of eligible claimants who originally applied to the scheme have now received offers of compensation, with £62mn already paid out.”