Work and pensions secretary Thérèse Coffey has given her department the go-ahead to breach departmental spending limits to keep up support for people affected by Covid-19.
Peter Schofield, permanent secretary at the Department for Work and Pensions, wrote to Coffey in April to request a ministerial direction to spend the extra cash “to ensure that any potential uncertainty about the availability of funding does not prevent the right and necessary actions being taken” to support people during the crisis.
DWP has been dealing with a massive influx of applications for Universal Credit as people have lost jobs due to coronavirus and the measures put in place to prevent its spread.
In the second half of March, when lockdown measures were coming into force, DWP received 950,000 new claims for Jobseekers Allowance and Universal Credit, up 692% on the same period the year before.
And figures published this week suggested more than 600,000 people had lost their jobs between March and May.
Meanwhile adjustments to Universal Credit, including a £1,000-a-year increase to the standard annual allowance, have also increased the amount DWP is paying out in benefits.
Although most benefit payments are accounted for through the annual spending process, extra DWP spending to address the coronavirus crisis includes £63m for local authorities to assist those struggling to afford food and other essentials.
In his letter to Coffey, dated 7 April and published yesterday, Schofield said DWP could not be certain the Covid-19 spending could be contained within its departmental spending limits.
“Exceeding those controls would be a breach of managing public money on regularity and propriety grounds,” he said.
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.
“On that basis, and recognising the extraordinary circumstances this country is facing, I am content to direct you to authorise spend to ensure that the department effectively responds to Covid-19, irrespective of the formalities of departmental expenditure limits,” Schofield wrote.
“Let me assure you that nothing in this request in any way undermines our determination to support as fully as we can the work of the government in providing excellent service to the public, processing claims and making payments, whilst also protecting our workforce at this time,” he added.
Responding to Schofield, Coffey said she recognised the work that DWP and the Treasury had put in to ensuring that the availability of funding would not delay or prevent action the department needed to take.
“On that basis, and recognising the extraordinary circumstances this country is facing, I am content to direct you to authorise spend to ensure that the department effectively responds to Covid-19, irrespective of the formalities of departmental expenditure limits,” she said.
Coffey, who last month praised the work of “hidden heroes” in DWP working to tackle the coronavirus crisis, added: “I want to put on record my gratitude to staff in the department for their extraordinary efforts to support people across the country during this time of emergency.”
11 ministerial direction issued in "extraordinary circumstances"
The instruction is among 11 ministerial directions issued to department heads in a two-month period to spend funds outside usual guidelines for coronavirus-focused schemes.
A direction from housing secretary Robert Jenrick, published this week, authorised the Ministry of Housing, Communities and Local Government to pay local authorities two grants a few days early. This would enable them to pass on grants put in place by the Treasury to companies that claim small business rates relief and rural rates relief, to mitigate the impact of Covid-19 on them.
The direction, issued on 23 March, was in response to a letter from MHCLG perm sec Jeremy Pocklington saying that while there was a “strong case” for moving the payments forward, doing so would be “irregular” as it would mean they would be paid in the 2019-20 financial year rather than 2020-21.
Issuing the ministerial direction to proceed, Jenrick agreed there was a “strong public interest in providing additional cash to local authorities before the end of the month, to allow them to act on the government’s recent announcements to tackle Covid-19”.
The first of the 11 directions to be published was to the Department of Health and Social Care, giving it the green light to breach departmental spending limits if needed to ensure there was no “barrier or delay” to taking action in “extraordinary circumstances”.
And seven have been issued to the Department for Business, Energy and Industrial Strategy after Alex Chisholm, its perm sec until April, and his successor Sam Beckett, raised concerns about a number of business grants and loans.