COVID 19: Cost Tracker Update Contents

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Summary

According to the NAO’s COVID-19 cost tracker, the government’s response to the pandemic has exposed the taxpayer to significant financial risk for the foreseeable future, with the estimated lifetime cost of the government’s measures reaching an eye-watering £372 billion in May 2021, with £172 billion reported spent. In making decisions and initiating measures at a much greater pace than during normal times, the Government took on a greater level of risk by relaxing some of the rules around spending decisions. Whilst departments faced difficulties in responding quickly to the pandemic, these risks did not always achieve good value for money. This is particularly the case in the estimated £92 billion of loans guaranteed by government as of May 2021, £26 billion of which we were alarmed to learn are now expected to be lost as a result of bad loans to businesses although the exact scale of loss is not going to be known for some time. HM Treasury must follow through on its plans to improve the quality of impact assessments and accounting officer assessments, and its intention to further embed the principles of good financial stewardship outlined in Managing Public Money.

As the UK recovers from the pandemic, it is now more vital than ever that the government, and HM Treasury as custodians of our future finances, maintain accountability for public money, transparency over how it is being used and clarity over what it is achieving. We therefore expect HM Treasury to include a comprehensive framework for managing the risks to public finances resulting from the COVID-19 response in its upcoming Spending Review. This will be followed up on when we hold a further session with HM Treasury later in the year after the NAO’s next update to the cost tracker in October 2021.

The NAO’s COVID-19 cost tracker has shown how information on the actions taken across the whole of government and their estimated costs can be identified and presented in one place, enabling the full picture to be understood. This will be vital in helping government prepare for future fast-paced crisis, or indeed any large cross-government programme, to enable government to make well-informed and rapid financial decisions. Such an approach should be supported by government and replicated in other situations where it would aid decision making, for example, achieving net-zero greenhouse gases by 2050.