COVID-19 cost tracker update – Report Summary

Summary

Government’s response to the pandemic has exposed the taxpayer to substantial financial risks from fraud and error. Government estimates that losses due to fraud and error from the Coronavirus Job Retention Scheme alone will be £5.3 billion. The estimated loss due to fraud and error across all COVID-19 response measures is not known but is expected to be at least £15 billion across measures implemented by HM Revenue & Customs, the Department for Work & Pensions and the Department for Business, Energy & Industrial Strategy. The total cost across government remains uncertain and could be higher, because of the long loan repayment terms. For example, loans to businesses under the Bounce Back Loan Scheme (BBLS) last up to 10 years and the typical loan period under the Cultural Recovery Fund is 20 years.

The National Audit Office COVID-19 cost tracker has increased transparency regarding the cost of the government’s response to the pandemic. The September 2021 update reports that government has spent £261 billion on 374 measures in response to the pandemic. The measures are expected to cost a total of £370 billion over their lifetime.

As we have repeatedly highlighted, as the UK recovers from the pandemic it is more vital than ever that government maintains accountability for public money and transparency over what is being spent. HM Treasury plans to review and update the costs associated with the COVID-19 loan schemes and some public service measures where these can be reliably attributed to COVID-19 but has not committed to continuing to update all the data currently captured in the cost tracker. We are concerned by the extent of costs that may be excluded by this method and that HM Treasury does not currently plan to distinguish the cost of COVID-19 from departments’ business-as-usual spending in future. Both of these hinder the opportunity for Parliament and the public to scrutinise the ongoing cost of the pandemic. In addition, while loans such as those provided under the Cultural Recovery Fund, and any liabilities associated with loans, such as the estimated cost of writing off some of the BBLS loans, will be recorded in the accounts of the relevant Departments there is a benefit to seeing the ongoing estimated cost of COVID-19 to the taxpayer in one place. Not only is it vital to be transparent with the taxpayer, it will also be helpful to government in planning for future risks which may require similar interventions.

HM Treasury needs to ensure that departments identify the lessons from the COVID-19 response and that these are put into practice. The 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 crises and large cross-government programmes and enabling government to make well-informed and rapid financial decisions.