Source · Select Committees · Public Accounts Committee
Recommendation 2
2
We are concerned that HM Treasury does not intend to adequately monitor and update the...
Conclusion
We are concerned that HM Treasury does not intend to adequately monitor and update the ongoing cost of COVID-19 to the taxpayer. Monitoring the forecast costs and actual spend related to COVID-19 is crucial for Parliamentary scrutiny and for holding departments to account for their use of taxpayers’ money. The cost-tracker has enabled Parliament and the public to have full visibility over what government has spent and committed to spend in response to the pandemic and the financial risks to the public purse. Government estimates that it will lose £21 billion as a result of loans that it does not expect will be repaid. HM Treasury will know more about how much will be lost in connection to these loan schemes over time as more repayment data is received. HM Treasury has committed to conduct a routine review of material changes to the estimated costs, including updating the costs associated with the COVID-19 loan schemes and some public services measures, where these can be reliably attributed to COVID-19. However, it has not specified which elements of government’s response to the pandemic will be included in these updates, what will constitute material changes to estimated costs, or how the costs of those elements which are excluded will continue to be monitored and Departments held to account for spending taxpayers’ money. From 2022–23 onwards, funding to tackle issues arising from COVID-19 will not be ring-fenced. Some of the costs currently included in the cost tracker will form part of departments’ ongoing activities. 6 COVID-19 cost tracker update Recommendation: As part of its Treasury Minute response, HM Treasury should explain how, when, and which subsets of the data captured by the NAO in the COVID-19 cost tracker it will continue to update. This should also address how loan book commitments, including those made under the Culture Recovery Fund, and any associated liabilities, such as estimated write-off costs under the Bounce Back Loans Scheme, will be moni
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. in improving transparency on the cost of COVID-19, providing timely updates on the nature and scale of spend. The Treasury has therefore committed to continue to conduct a routine review of these costs, where there have been material changes that can be reliably attributed to COVID-19, and to provide public updates. These updates will be published annually for the next two years, after which the Treasury will review what is still required given, over time, it will become increasingly difficult to distinguish COVID-19 pandemic spend from business as usual spend. These annual publications will provide updates on, for example, the estimated lifetime cost of loans (including the Bounce Back Loan Scheme and loans through the Culture Recovery Fund). It will also provide updates on the costs of large COVID-19 pandemic specific public services measures, such as vaccines and balance sheet items such as personal protective equipment. This annual document will supplement audited figures in departmental annual reports and accounts and other publications, providing a timely update with provisional (unaudited) data. 3: PAC conclusion: HM Treasury does not yet know how much money has been lost to fraud and error across government’s response to COVID-19. 3: PAC recommendation: HM Treasury should write to the Committee by the end of the financial year with its estimate of: • How much taxpayer’s money has been lost to fraud and error within schemes introduced in response to the pandemic; and • How much it expects will be recovered for each pound it spends doing so. 3.1 The government agrees with the Committee’s recommendation. 3.2 The department wrote to the Committee on 31 March 2021 to respond to these questions. Each department is responsible for estimating fraud and error in the schemes it administers. The latest estimates are set out in departments’ 2020-21 Annual Report and Accounts (ARAs). Updated estimates will be published in the next few months in 2021-22 ARAs. 4: PAC conclusion: HM Treasury has not set out what lessons it has learnt from the government’s response to COVID-19 and how it will apply these in future. 4: PAC recommendation: HM Treasury should write to the Committee by the end of the financial year setting out: • What is has learned from the government’s response to the COVID-19 pandemic; and • What action it is taking to identify and collate learning form across government departments. 4.1 The government agrees with the Committee’s recommendation. 4.2 The department wrote to the Committee on 31 March 2021 as part of the letter noted under 3.2 above, outlining lessons and actions that have been taken across public spending, finance and economic support schemes.