Recommendation 3

The COVID-19 response means government will be exposed to significant financial risks for decades to come. As a consequence of responding quickly to the pandemic, government has taken on significant financial risks that are spread across multiple government departments and schemes. While we acknowledge that 6 COVID 19: Cost Tracker Update there was a need to relax the usual rules surrounding major spending decisions and introduce flexibilities due to the emergency circumstances of the pandemic, we are concerned that this has created serious risks that may require managing for years. A clear example of risks from the government’s approach materialising is the 10,000 shipping containers of personal protective equipment (PPE) ordered earlier in the pandemic that we heard in May were still yet to be unpacked. HM Treasury used the example of vaccines development to show how government took on necessary risk, in this case to develop vaccines much more quickly, with government spending more to achieve that speed. The Chief Secretary to the Treasury has explained, in his 1 April 2021 letter to the Chair of the Treasury Committee, government’s approach to spending controls during COVID-19, acknowledging that there were successes and areas where lessons need to be learnt on how best to apply an emergency control framework. Recommendation: HM Treasury should develop a single cross-government framework for monitoring and managing the risks to public finances stemming from government’s COVID-19 response. HM Treasury should then explain in the autumn Spending Review how it plans to manage these risks and any fiscal trade- offs that will need to be made.