UK taxpayers faced a loss of at least £230 million on the sale of Lloyds shares to institutional investors in September 2013, a comprehensive analysis of the disposal has found.
The report, issued by the National Audit Office, refuted chancellor George Osborne’s claim that the public had made a profit from the partial return of the bank the private sector.
That claim had been made by simply comparing the cost of sale, at 75p, to the cost of purchase. The NAO identified the differences after netting that against the cost of government borrowing.
‘There was a shortfall for the taxpayer of at least £230 million,’ wrote the NAO.
‘A simple comparison of the price at which the shares were bought with the sale price produces a gain for the taxpayer of just under £120 million. However, taking account of the cost of borrowing the money to buy the shares produces a shortfall of £230 million.’
Nonetheless the NAO found that the sale had been well conducted, ‘managed effectively and provided value for money’.
‘This shortfall should be seen as part of the cost of securing the benefits of financial stability during the financial crisis, rather than any reflection on the sale process,’ it added.