Source · Select Committees · Public Accounts Committee
Recommendation 24
24
Accepted
Full impact of pandemic spending measures will remain unknown for many years.
Conclusion
The final cost and impact of some of the measures introduced in response to the pandemic will not be known for many years. We examined the Bounce Back Loans Scheme in December 2020 and April 2022, where we found that the Scheme’s impact could only be judged when borrowers reached the end of their six- or ten- year loan period and their loans were either repaid or written off if the business has not survived.37 In June 2021, we also examined the Culture Recovery Fund, a £1.57 billion fund which aimed to save up to 75% of organisations in the arts, culture and heritage sectors at risks of financial ruin following the national lockdown. The loans had a 20 year term, with a low interest rate and no repayments for two to four years.38 We noted that the recipients of these unexpected injections of funding will have absorbed that money into their forward funding plans and will have reconfigured how they will fund future activities. We asked the Treasury whether the taxpayer was subsidising an organisation unnecessarily, or was stimulating growth, innovation, and employment opportunities. Given the length over which spending measures such as the Culture Recovery Fund and Bounce Back Loan Scheme funding will be repaid, we also asked how the Treasury would ensure that this spending could be evaluated by the next generation of elected and permanent officials without having to go through every individual Department’s accounts. HM Treasury told us that it had recently written to all Departments to remind them of the expectation that material policies are evaluated. It confirmed that it would be checking that major policies are evaluated in the way intended.39
Government Response Summary
The government agrees to continue tracking COVID-related costs, stating it will outline further details after summer 2024, and commits to providing a list of relevant COVID scheme evaluations by July 2024 and an April update on its exercise to distil cross-cutting lessons from pandemic business support.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2024 4.2 HM Treasury recognises the value of continuing to track COVID-related costs beyond the Cost Tracker. In addition to the Cost Tracker, some departments publish regular updates on key items of spending, e.g. DCMS published a report on the Cultural Recovery Fund, and DBT publish quarterly repayment data on the largest COVID loan schemes. 4.3 HM Treasury will set out further details on how it will continue to track ongoing COVID-related costs after the publication of the HMT Covid Cost Tracker in summer 2024. This will allow us to understand which areas of COVID spending remain “live” and how best to continue tracking spend in these areas. 4b. PAC recommendation: HM Treasury should, by July 2024, provide a compendium of evaluation of COVID schemes from across Government, and cross cutting lessons to learn. 4.4 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2024 4.5 HM Treasury sees the value in evaluating the success of COVID schemes in achieving policy aims and remains committed to learning and sharing lessons from the response to the pandemic. 4.6 The government has written to the Committee regularly over the last four years explaining where improvements to processes can and have been made. For example, the government's response to recommendation 1 of the Committee's Forty-Sixth Report of Session 2021-22 provided an update on the steps taken to bolster the department’s approach to risk management, including the creation of a Risk Management Strategy and Delivery Plan. 4.7 The then Chief Secretary also wrote to the Treasury Select Committee on 1 April 2021, copied to the Chair of the PAC, explaining the lessons learned by the department, on how responding to the pandemic required the department to administer the spending control framework more flexibly than during ‘normal’ times. HM Treasury continues to refine the spending framework annually to ensure it remains fit for purpose. 4.8 HM Treasury sees the value in bringing together evaluations of COVID schemes, including completed and in-flight evaluations, into a single compendium. HMT is content to provide a list of relevant evaluations in July 2024. 4.9 Separately, HM Treasury has committed to carry out an exercise to distil lessons from the experience of supporting businesses through the pandemic, drawing on existing evaluations and reports, and where relevant including cross-cutting lessons to learn. HM Treasury will provide the Committee with an update on its progress in April.