Source · Select Committees · Public Accounts Committee
Recommendation 6
6
It will become increasingly important to distinguish between spending that is aimed at economic and...
Conclusion
It will become increasingly important to distinguish between spending that is aimed at economic and societal recovery from COVID-19, from spending in direct response to COVID-19. The cost tracker suggests that around 92% of the cost of government’s COVID-19 measures is categorised as being in direct response to the pandemic, with the remaining 8% attributed to the wider economic and societal recovery from the pandemic. However, this distinction is inexact, as for some measures it can be difficult to precisely define whether spending relates to the response phase or the recovery phase of government’s overall response to the pandemic. Some measures contribute to both objectives, for example the vaccines programme. For some measures, it is difficult to distinguish activity that results directly from COVID-19 from business-as-usual activity, for example with new Universal Credit claims. HM Treasury acknowledges the need for better understanding of the progress of the pandemic and the economy in order to assess the cost of recovering from COVID-19. It expects more reliable information to be available by September as the uptake and repayments against major schemes like the Bounce Back Loans Scheme become clearer. Recommendation: Government should, through the autumn Spending Review, set out a fully costed plan for recovering from the COVID-19 pandemic and returning to ‘business as usual’. 8 COVID 19: Cost Tracker Update 1 HM Treasury’s understanding of COVID-19 costs
Government Response
Acknowledged
HM Government
Acknowledged
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The government set out its spending plans and choices up to 2024-25 in the Autumn Budget and Spending Review 2021 document. These plans prioritise building back better from the COVID-19 pandemic, including by investing in public services, levelling up, and leading the transition to net zero. 6.3 HM Treasury has not set a COVID-19 policy ringfence for funding provided at Spending Review 2021 because most of the ongoing COVID-19 costs now form part of departments’ ongoing activities or may be indirect impacts of COVID-19, making it difficult to distinguish them from departments’ core costs so it is optimal to manage these together. 6.4 However, it has provided funding for the recovery from the pandemic, such as committing £9.6 billion across the Spending Review 2021 period for Covid-19 health related spending including for vaccines and potential boosters; more than £8 billion to tackle the elective backlog in the NHS; a further £1.8 billion to support education recovery; £225 million 5 to fund the criminal justice system's recovery from COVID-19; and an additional £1.6 billion of grant funding for local authorities in each of the next three years to meet pressures in social care and other services, which is on top of the £5.4 billion funding announced in September to implement the social care reform over the three-year Spending Review 2021 period. 6.5 Spending Review 2021 also provides funding to strengthen local government delivery. This includes additional funding to support councils improve their cyber security, and funding to strengthen the sector's procurement and commercial capacity, alongside funding to establish the Audit Reporting and Governance Authority (ARGA) as the new local audit systems leader. 6