Government has risked & lost “unacceptable” billions of taxpayers’ money in its Covid response - and must account to the generations that will pay for it
23 February 2022
In its report today the Public Accounts Committee says the total cost of UK Government losses in the response to the Covid 19 pandemic remains uncertain, but it has clearly exposed the taxpayer to substantial, long-term financial risks and “large amounts” - now running into many billions of pounds - of taxpayer’s money will be lost to fraud and error.
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The Coronavirus Job Retention – or furlough - Scheme alone is estimated to lose £5.3 billion to fraud and error - 8.7% of the funding distributed through the scheme. The estimated loss to fraud and error across all Covid 19 response measures is not known but is expected to be at least £15 billion across the schemes and loans implemented by HM Revenue & Customs, the Department for Work & Pensions and the Department for Business, Energy & Industrial Strategy.
The National Audit Office Covid 19 cost tracker September 2021 update reports that government has spent £261 billion on 374 measures in response to the pandemic. The measures are expected to cost a total of £370 billion over their lifetime – up to 10 years in the repayment term of the Bounce Back Loan Scheme (BBLS) and typically 20 years in the Cultural Recovery Fund.
The Committee is concerned that HM Treasury does not currently plan to distinguish the cost of COVID-19 from departments’ business-as-usual spending in future, saying that “as the UK recovers from the pandemic it is more vital than ever that government maintains accountability for public money and transparency over what is being spent”. The Committee has repeatedly said this will be crucial to ensure lessons are properly learned and embedded so the same mistakes that led to these “unacceptably high” losses and risk, already to be borne by generations of taxpayers, are not repeated in any future crisis.
Dame Meg Hillier MP, Chair of the Public Accounts Committee, said:
“As the PAC has made clear across a series of reports on the costs of Covid, lack of preparedness and planning, combined with weaknesses in existing systems across Government, have led to an unacceptable level of mistakes, waste, loss and openings for fraudsters which will all end up robbing current and future taxpayers of billions of pounds.
It is essential that for as long as we will be paying the costs of Covid19, which is at least the next 20 years just in some of the loan repayment terms, the Treasury and all of Government continue to account specifically for what it has spent in response to the pandemic. Government must be held accountable in this way to all the future taxpayers who will be paying for this response. Crucially this must ensure lessons are learned for when the next big crisis hits - be it climate, health or financial.”
- Inquiry: Covid-19: Cost tracker update (+ Spending Review)
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