Source · Select Committees · Public Accounts Committee
Recommendation 7
7
We are concerned that HM Treasury is unable to explain how much the extended schemes...
Conclusion
We are concerned that HM Treasury is unable to explain how much the extended schemes are forecast to cost or what would constitute value for money. HM Treasury argues that it falls to the Office for Budget Responsibility (OBR) to produce forecast costs for the scheme extensions. However, HM Treasury is nonetheless responsible for providing assurance to Parliament of the value for money of schemes, of which costing is an important part. The OBR now forecasts that extensions to the schemes will cost the taxpayer a further £21 billion. It is also unacceptable that the Departments are unable to explain what constitutes value for money in these schemes. We accept that when the schemes were initially developed back in the spring the exceptional circumstances at that point made such analysis difficult. In the intervening period, however, we would have expected HM Treasury to have developed a more rigorous assessment of the costs and benefits of the schemes to ensure taxpayer money is spent wisely. Recommendation: HM Treasury should write to the Committee within a month to set out how it will assess value for money for the extended schemes. 8 Covid-19: Support for jobs 1 Implementing and evaluating the initial covid-19 employment support schemes
Government Response
Not Addressed
HM Government
Not Addressed
7.1 The government agrees with the Committee’s recommendation. Recommendation implemented 7.2 As requested by the Committee, the Permanent Secretary to the Treasury wrote to the committee 29 on 20 January 2021 outlining how HM Treasury will assess value for money (VFM) for the extended schemes. HM Treasury considered the VFM of the schemes and subsequent changes at key stages of the policy making process. Ensuring VFM, protecting employment and supporting businesses were central to the decision-making for the CJRS and SEISS extensions. Extending the CJRS was a critical response to the economic conditions, and the Office of Budget Responsibility have estimated that this extension will support up to 6 million jobs in November 2020 declining thereafter. The OBR have also estimated that unemployment would have been higher in the second quarter of 2021 in the absence of the CJRS and other measures. 7.3 The revised cost of the CJRS and SEISS will be set out at the next Budget in March 2021. Given the economic and fiscal significance of the CJRS, HM Treasury and HMRC are undertaking an evaluation of the schemes. 7.4 In December 2020, the departments published the Evaluation Plan for the CJRS, which sets out their approach to evaluating the CJRS. 7.5 The CJRS evaluation will draw on the Magenta Book and Green Book. The departments also plan to evaluate the SEISS, although self-assessment data will not be available until at least 2022.