Coronavirus: MPs shocked at ‘astonishing failure’ to plan for economic impact of a pandemic
MPs have lashed out at the Government over what they deem to be an “astonishing” failure to come up with an economic plan to deal with a pandemic.
In a scathing report, members of the Public Accounts Committee expressed dismay that, despite the threat of a pandemic being one of the Government’s top risks, ministers failed to consider in advance how to deal with the economic impact of a disease outbreak.
MPs also called on the Cabinet Office and the Treasury to report back in September with a “second wave ready” plan for the economic impacts of another potential outbreak of coronavirus.
“Pandemic planning is the bread and butter of government risk planning, but we learn it was treated solely as a health issue, with no planning for the economic impacts,” said Meg Hillier, chair of the committee.
Though the committee recognised the effectiveness of the furlough scheme, brought in to protect millions of jobs, they argued there could be long-term implications from a failure to plan in advance.
On the Government’s economic response to the coronavirus crisis, Ms Hillier told The House Live: “It feels very haphazard and also the danger is, if you do things quickly, there are unintended consequences.”
The committee heard evidence that the Treasury had taken until mid-March before designing the economic support schemes set up to contain widespread unemployment.
Hillier argued that a “silo mentality” in Whitehall was partly responsible for the lack of planning, with departments failing to communicate effectively with one another, alongside an incorrect perception that a pandemic was only a health issue.
“The other thing is, and this is stretching beyond the report, it is a bit of a sign that these things we think will never happen drop down priorities very quickly, especially if you’ve got budget cuts or priorities that are coming from other directions,” she said.
She added: “For the next 100 years there will be strong ownership of emergency planning, won’t there?”
For Ms Hillier, who has been chair of PAC since 2015, a lack of contingency planning in Whitehall is not a new phenomenon.
“There wasn’t a plan for voting to Leave before we voted to Leave. That has been really apparent. We have seen form of this,” she said.
However, much of that responsibility rests with politicians, she argued.
The PAC chair said: “It is partly political, but it’s also the way the system works.
"Civil servants don’t usually do things randomly without some sort of political direction – they will do certain business-as-usual things – but planning for the consequences of a pandemic should be business-as-usual.”
This failure is in part due to the nature of British politics, she added. “If you think about politics today – the 24-hour media, social media and everything – it’s very in the moment, isn’t it?
"People are judged in the moment; they need to make their decision in the moment. Thoughtful, sensible, long-term planning is not flavour of the month,” she said.
Asked if she believed planning for the economic impact of a second wave of coronavirus was taking place now, she said: “No.”
‘PICKING WINNERS AND LOSERS’
It comes as MPs on the Treasury committee accused Chancellor Rishi Sunak of “turning its back” on people who have been excluded from government support for four months.
In a report published in June, the committee said more than a million people had fallen through the gaps of the Government’s coronavirus support schemes and called on ministers to reconsider.
Responding, Sunak stood by his decision to close in October the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS), and said his focus was now on generating and protecting jobs.
“The CJRS and SEISS were the right policies for the first phase of the crisis, but now, in this new phase, we need to look forward and evolve our approach,” he said.
“As I set out for the House last week, the Government’s plan for jobs is the necessary next step after Covid-19. To rebuild and recover, we must support, protect and create jobs. This is exactly what we are doing.”
Treasury Committee chair Mel Stride called on the Government to “re-think its position”.
“The Chancellor has effectively drawn a line under helping the million-plus people who have been excluded from support for four months,” he said.
“Despite stating that he will not pick winners and losers when it comes to sectors and businesses that need support, the Chancellor has done this when it comes to households and individuals.
“The Chancellor said that the schemes were designed to be open and accessible to as many people as possible, but the Committee remains to be convinced that more people could not have been helped.
“The Chancellor initially told those at risk of losing their livelihoods that they would not be forgotten. While the Government is clear that it is moving on to the next phase of its recovery plan, it cannot just turn its back on those who are suffering.”
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