Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Acknowledged
We pressed the Departments on the schemes’ wider impacts including whether the schemes had contributed...
Conclusion
We pressed the Departments on the schemes’ wider impacts including whether the schemes had contributed to the increasing number of business insolvencies and the increasing level of economic inactivity, given that the number of inactive people over 50 increased by almost 500,000 between October to December 2019 and October to December 2021. The Departments told us that the final evaluations would seek to look at the schemes’ impacts on inactivity within the working age population, but said there was no evidence that showed increasing inactivity was particularly related to the schemes. On insolvency, HMRC said that there had been a legal embargo on creditor insolvencies, which had created some “pent-up pressure”. HMRC considered that it was inevitable there would be an increase in creditor insolvencies following the lifting of the embargo in 7 Q 1; HMRC, CJRS Interim Evaluation, October 2022, section 1.2, https://www.gov.uk/government/publications/ the-coronavirus-job-retention-scheme-interim-evaluation (accessed 1 December 2022); and HMRC, SEISS Interim Evaluation, October 2022, section 5.2, https://www.gov.uk/government/publications/the-self-employment- income-support-scheme-interim-evaluation, (accessed 1 December 2022). 8 Q4; HMRC, CJRS Interim Evaluation, October 2022, section 1.2; HMRC, SEISS Interim Evaluation, October 2022, section 5.2 9 Qq 20–22, 45 10 Qq 29–30, 37, 43 11 Qq 30, 37, 44 10 COVID employment support schemes March 2022 and some of this was down to ordinary economic events. The Departments did not say whether their final evaluations would cover the impact of the schemes on the levels of insolvency.12
Government Response Summary
The Departments stated that final evaluations would examine the schemes’ impacts on inactivity but that there was no evidence of increasing inactivity being particularly related to the schemes. They added that there had been a legal embargo on creditor insolvencies which had created some pent-up pressure.
Government Response
Acknowledged
HM Government
Acknowledged
1: PAC conclusion: The Departments do not have a good enough understanding of the impacts of the £97 billion of taxpayers’ money they spent on the COVID-19 employment support schemes. 1a: PAC recommendation: The Departments should, by December 2023, publish their final evaluations of CJRS and SEISS, which should cover their wider impacts including on business and people who were ineligible, economic inactivity amongst the over 50s, second jobs for furloughed staff and consequences of support for those not adversely affected by the pandemic. 1.1 The government agrees with the Committee’s recommendation. 16 Target implementation date: by December 2023 1.2 HM Treasury and HM Revenue and Customs (HMRC) will publish the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) final evaluations by December 2023. The final evaluations will build on the evidence published in the interim evaluations in October 2022, by assessing the entire impact of the schemes up until their closure in September 2021. The final evaluations will also include a value for money assessment, including a consideration of possible deadweight, for the schemes. 1.3 Through the CJRS final evaluation, evidence will be provided on the issues raised by the Committee, where data allows. The schemes were implemented at pace, and designed in such a way as to minimise fraud and error while not unnecessarily delaying payments. The CJRS final evaluation will assess the impact on employers who did not use the scheme, as well as employees not placed on furlough, as appropriate comparators in assessing the scheme’s impact. For the SEISS, the ineligible self-employed population will be assessed as part of the evaluation.