Government pours £210bn into effort to fight Covid-19

The Government has committed around £210 billion to fight the Covid-19 crisis, according to a new estimate from the National Audit Office (NAO).

The NAO said that more than £70 billion of the committed money has so far been spent, with much more yet to come.

As of August 7 the Government had announced 190 measures, the auditors said.

Support for British businesses and employees has made up a large proportion of the commitments.

Among the most expensive programmes is the coronavirus job retention scheme, which is estimated to cost the Government around £47 billion.

The scheme promised to cover up to 80% of an employee’s salary if they were placed on furlough and unable to work due to the Covid-19 pandemic. So far £35.4 billion has been spent on the scheme.

On Monday, the chief executive of HM Revenue and Customs, Jim Harra, said that his staff have projected that up to 10% of this might have been paid out wrongly, or to fraudsters.

The Government has also promised a bonus £1,000 per employee payment to businesses who bring back furloughed staff at least until January.

Officials believe this could cost up to £9.4 billion if it is claimed for every furloughed employee, though the Office for Budget Responsibility (OBR) estimates a lower £6.1 billion, after accounting for the staff who will have lost their job before January.

Meanwhile, the OBR estimated that three Government-backed loan schemes that are administered by the high street banks are likely to cost £17 billion in write-offs.

A majority of this, just over £16 billion, came from one scheme – the bounce back loans.

In total around £52.7 billion has been lent under the three schemes, with the Government saying it will cover a majority of the loans if the businesses were to default.

At the beginning of the schemes, the Government believed they could cost around £5 billion.