Kent County Council has written off more than £3 million of interest-free loans to small businesses which have gone bust, doubling the amount of lost taxpayers’ cash in less than a year.

The number of firms which have fallen into administration or closed after being lent money has also more than doubled to 17 since September, when the figure stood at £1.5 million, according to a freedom of information request submitted by Kent Business.

It can also be revealed the directors of one company which received £156,556 before going bust have set up a new business selling the same products from the same premises.

Flying Fish Hovercraft, which sold hovercrafts from Sandwich Industrial Estate, received the cash from Kent County Council’s Expansion East Kent scheme.

It was wound up in 2014 but its three directors, husband and wife Russell and Emma Pullen and Mr Pullen’s father Ivan, are now trading as the British Hovercraft Company from the same site.

Mrs Pullen did not respond to requests for comment.

Kent County Council runs several interest-free loan schemes using money awarded through the government’s regional growth fund, which has invested £2.6 billion to help local businesses grow since 2010.

The council has lent £34.7 million through Expansion East Kent, £14.5 million through another programme called TIGER, £5.5 million through Escalate and £1.6 million through Small Business Boost.

It has also lent £844,000 through a scheme called Marsh Million, which it runs with Ashford council, Shepway council and nuclear firm Magnox.

Of £3.2 million it deemed bad debt after company failures, it has only been able to recover £138,401.

Each scheme has allocated all its money, except for Marsh Million, which still has £155,871 to lend to micro-businesses.

So far, 283 companies have received loans, with £6,713,721 repaid so far. It is the council’s intention to relend the money to other businesses.

“Most of the 283 companies which have received funding are prospering and creating jobs that have a direct impact on the economy and people of Kent...” - Jacqui Ward, KCC

The assessments of who receives the loans is carried out by auditor PwC for Expansion East Kent, TIGER and Escalate, while KCC Finance assess the Small Business Boost and Marsh Million.

Kent County Council said it had expected a failure rate of 20% when it began lending and was pleased to be below that level.

Its business investment chief Jacqui Ward said: “There has been a disappointing rise in the level of bad debt, but this is not the same as the write-off figure.”

She said the council has been successful in pursuing a number of the companies for payment, adding: “Most of the 283 companies which have received funding are prospering and creating jobs that have a direct impact on the economy and people of Kent, and 17 failures is a comparatively small number.”