Recommendation 6

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