Source · Select Committees · Public Accounts Committee
Recommendation 22
22
The NAO’s latest COVID-19 cost tracker estimates that around 90% of the projected cost of...
Conclusion
The NAO’s latest COVID-19 cost tracker estimates that around 90% of the projected cost of the pandemic will be spent on the government’s response to COVID-19, and around 10% on the recovery phase.40 HM Treasury explained that it is extremely difficult to categorise much COVID-related spending as either part of dealing with the pandemic, or part of recovering from it. It highlighted the vaccines programme as an example of a government action that bridges the two categories. Similarly, economic support schemes, such as the furlough scheme and the various business loan schemes, are both a response to the immediate situation and a critical part of recovery, because they are designed to minimise the long-term damage to the economy from the pandemic. HM Treasury told us it intends to work with the NAO on how best to capture the forecast costs of the recovery.41
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 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.