Coronavirus spending: 11 ministerial directions issued to perm secs so far, NAO finds
"The costs of government’s response are large and uncertain," public spending watchdog says
Matt Hancock is among the ministers who have directed perm secs to push ahead with extraordinary spending. Photo: Yui Mok/PA Wire/PA Images
Permanent secretaries have been given 11 ministerial directions to spend funds outside usual Treasury money-management guidelines during the coronavirus pandemic, the National Audit Office has found.
The figure was revealed a report published today, which found spending on Covid-19 measures to date has added up to more than £120bn.
Perm secs must ask for a written ministerial direction when they believe a proposed policy or programme would breach the Treasury’s Managing Public Money guidance – for example, if a programme seems unfeasible or is unlikely to provide value for money.
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During the coronavirus crisis, departments have sought directions for urgent spending that would breach their ordinary spending limits, and because it has not been possible to assess value for money for some schemes in the usual way, the public-spending watchdog said.
Among the directions to have been issued so far is an instruction from health secretary Matt Hancock to cover extra spending the Department for Health and Social Care needed to respond to the pandemic.
DHSC perm sec Chris Wormald and NHS England chief executive Simon Stevens had written to Hancock for the approval to ensure there was no “delay to the agreement of spend in support of our efforts to tackle coronavirus”.
And last month the Department for Business, Energy and Industrial Strategy published an exchange of letters between Alex Chisholm, its permanent secretary at the time, and business secretary Alok Sharma concerning a fund to support small businesses affected by the coronavirus crisis.
Chisholm, who has since became civil service chief operating officer, said while there was “good policy rationale” for the announcement, he could not be certain it would provide good value for money. Sharma gave the go-ahead in his reply, saying the scheme was a “key component in the government's comprehensive response… which is designed to support the economy through this time of crisis”.
Today’s NAO report showed government has announced some £82.2bn in support to business, which also includes the furlough scheme – more than two-thirds of coronavirus spending to date.
By contrast, just £6.6bn of the total has gone on health and social care measures such as equipment, testing, services and vaccine development.
The watchdog found the government has made more than 500 announcements and launched some £124.3bn in programmes, initiatives and spending commitments to tackle the effects of coronavirus.
These costs include £111.3bn for grants and other payments, an estimated £5bn in loans and £8bn in increases to benefits.
Not included in the costs are the loss of receipts to the exchequer – mostly from deferred tax payments – totalling £4.4bn.
However, the eventual spending total is difficult to calculate, according to the report. “The costs of government’s response are large and uncertain and will depend on the continuing health and economic impacts of the pandemic,” it said.
This report is the first in a series that the NAO is conducting to support parliament’s scrutiny of the government’s response to Covid-19. It provides a summary of the response to date but does not assess the money or their effectiveness of the measures.
In later reports it will continue to update parliament on further government announcements, programmes and costs. It will also audit specific elements of government’s response, to identify lessons for this and potential future pandemics.
Commenting on the report, NAO head Gareth Davies said: “The scale and nature of the Covid-19 pandemic and government’s response is unprecedented in recent history.
“This report outlines the range of measures taken by government to date and where financial support has been targeted. It also forms the basis for a substantial programme of independent reports from the National Audit Office to parliament and the public on how the money has been spent and the lessons learned.”
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