UK Inquiry Tracker

COVID-19: Support for jobs

Public Accounts Committee Closed Inquiry

Opened: 21 Oct 2020 Closed: 25 Mar 2021 Parliament page

In mid-November the Committee will question the most senior officials at the Treasury and HM Revenue & Customs (HMRC) in its latest inquiry into the Government’s response to the Covid-19: this time on the programmes to support jobs during the pandemic. The Government implemented the Coronavirus Job Retention Scheme - … Read more

16 Recommendations

6 Conclusions

1 Report

1 Oral session

4 Letters

1 Event

Activity timeline 7 events

15 Sep
2021

Correspondence

Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, re Thirty-Fourth Report of Session 2019-21, dated 19 March 20…

16 Apr
2021

Correspondence

Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, re Thirty-Fourth Report of Session 2019-21, dated 19 March 20…

15 Apr
2021

Correspondence

Correspondence from Tom Scholar, Permanent Secretary, HM Treasury, re Thirty-Fourth Report of Session 2019-21, dated 19 March 2021

25 Mar
2021

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty fourth report from Session 2019-21

26 Jan
2021

Correspondence

Correspondence from Tom Scholar, Permanent Secretary, HM Treasury, re Thirty-Fourth Report of Session 2019-21, dated 20 January 2021

20 Dec
2020

Report published

Thirty-fourth Report - Covid-19: Support for jobs

12 Nov
2020

Oral evidence

COVID-19: Support for jobs

Oral evidence sessions 1 session

12 Nov 2020

View on parliament.uk

COVID-19: Support for jobs

Beth Russell · HM Treasury Jim Harra · HMRC Jo Rowland · HM Revenue and Customs Sir Tom Scholar · HM Treasury

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Thirty-fourth Report - Covid-19: Support for jobs	HC 920	20 Dec 2020	22	Responded

Recommendations & Conclusions

13 results

2 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

The age of the Self Assessment system made it more difficult for HMRC to provide...

The age of the Self Assessment system made it more difficult for HMRC to provide financial support for the self-employed. Its tax system for the self-employed lags behind that available in other countries. The Self Assessment system was built in … Read more

Government Response

The government accepts the recommendation and committed to providing an explanation by March 2021, detailing how insights from other countries' self-employed tax systems are being applied to the Making Tax Digital programme and wider tax administration strategy.

HM Treasury

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3 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

The Departments have not done enough to reduce the number of people excluded from the...

The Departments have not done enough to reduce the number of people excluded from the schemes. The Departments still do not have a complete assessment of the number of people excluded from the first phase of CJRS and SEISS up … Read more

Government Response

The government accepts the recommendation and states it has been implemented, having investigated data sources for excluded groups and liaised with other departments. It explained that schemes balanced support with fraud prevention using existing HMRC data, and highlighted ongoing efforts through the 10-year Tax Administration Strategy.

HM Treasury

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5 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

The Departments will not know the actual levels of fraud and error within these schemes...

The Departments will not know the actual levels of fraud and error within these schemes until 2021. HMRC does not expect to have a statistical estimate of the total fraud and error levels across both schemes until the end of … Read more

Government Response

The government accepts the recommendation, agreeing to write to the Committee by March 2021. It confirms provisional fraud and error assessments are in place, with ongoing improvement of evidence, and outlines its risk-based and post-payment compliance approach for recovering incorrectly claimed grants.

HM Treasury

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7 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

We are concerned that HM Treasury is unable to explain how much the extended schemes...

We are concerned that HM Treasury is unable to explain how much the extended schemes are forecast to cost or what would constitute value for money. HM Treasury argues that it falls to the Office for Budget Responsibility (OBR) to … Read more

Government Response

The government agrees with the recommendation and states it has been implemented, confirming that the Permanent Secretary to the Treasury wrote to the committee on 20 January 2021, outlining how HM Treasury will assess value for money for the extended schemes.

HM Treasury

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10 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

The extension of both schemes was announced in November 2020.

The extension of both schemes was announced in November 2020. At that stage the initial schemes had not been formally evaluated. The Departments told us that they were undertaking informal evaluations to help them tailor their communications to those the … Read more

Government Response

The government agrees with the recommendation and states it has already implemented it by regularly monitoring and publishing official statistics on CJRS and SEISS, including take-up by area, age, and gender, and has published a detailed evaluation plan for CJRS.

HM Treasury

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11 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

We asked whether the Departments had undertaken any evaluation on the regional differences in take-up...

We asked whether the Departments had undertaken any evaluation on the regional differences in take-up or the schemes and take-up by groups with protected characteristics.24 HMRC currently reports monthly on the cost of the schemes and provides analysis on take-up … Read more

Government Response

HM Treasury

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12 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

HMRC’s initial planning assumptions suggested that the level of fraud and error would be 5%...

HMRC’s initial planning assumptions suggested that the level of fraud and error would be 5% to 10% within CJRS and 1% to 2% within SEISS. We asked whether it expected the level of fraud and error to change under the … Read more

Government Response

HM Treasury

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15 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

Two further groups that were largely excluded from support were freelancers and owner-managers of companies.

Two further groups that were largely excluded from support were freelancers and owner-managers of companies. Freelancers generally have short-term contracts with employers and as a result many might not have been on a company’s PAYE system at the cut-off point … Read more Two further groups that were largely excluded from support were freelancers and owner-managers of companies. Freelancers generally have short-term contracts with employers and as a result many might not have been on a company’s PAYE system at the cut-off point for furlough. HM Treasury said that was aware of the issues, but that the lack of data held by HMRC and the fact that the tax system wasn’t designed to regularly capture information on such people made it particularly difficult to bring freelancers into the scheme. Some 0.4 million freelancers may have missed out on support from the 32 C&AG’s Report, para 14 33 Qq 73, 79 34 Public Accounts Committee, Oral Evidence: HM Revenue & Customs 2019–20 Standard Report, HC 690, Q 13 35 Qq 73–75, C&AG’s Report paras 2.9–2.10 14 Covid-19: Support for jobs first schemes.36 We also asked about owner-managers of companies who may have been excluded. HMRC explained that owner-managers qualify for the furlough scheme to the extent that they pay themselves through their PAYE system. It acknowledged that many owner-managers opted to pay themselves a small amount in this way, and rely predominantly on dividend income. HMRC maintained, however, that the schemes were not aimed at supporting investors for the loss of dividend income and that it did not hold sufficient information from tax return data to be able to distinguish between what is investment income and what is income in lieu of salary. We asked HMRC whether other sources of government data could be used to verify the eligibility for the schemes from those groups currently excluded; for example, information held by Companies House might distinguish between different types of dividend income. It said that this was something it had looked at closely over the years from a tax perspective but had not found a way of distinguishing between the different types of dividend income.37 Changes to the schemes created uncertainty Show less

Government Response

The government accepts the recommendation, stating it has been implemented by investigating data sources for excluded groups and liaising with other departments. It reiterates that schemes prioritized existing HMRC data for verification and highlights ongoing efforts through the 10-year Tax Administration Strategy for better data.

HM Treasury

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18 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

Employees who were let go after 23 September 2020 can be rehired and furloughed again...

Employees who were let go after 23 September 2020 can be rehired and furloughed again with CJRS extended, but if they were let go before that date then it would not be possible to furlough them. HM Treasury told us … Read more

Government Response

The government agrees with the recommendation and states it has implemented it, explaining that eligibility has been extended where possible while balancing fraud prevention. They highlight past actions and state they continue to explore further options.

HM Treasury

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19 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

We asked the Departments how much they expected the extended furlough scheme and the SEISS...

We asked the Departments how much they expected the extended furlough scheme and the SEISS would cost the taxpayer on top of the £55 billion spent so far. HM Treasury told us that it was not responsible for forecasting the … Read more

Government Response

The government agrees with the recommendation and states it has been implemented, confirming that the Permanent Secretary to the Treasury wrote to the committee on 20 January 2021 outlining how HM Treasury will assess value for money. Revised costs will be set out at the next Budget.

HM Treasury

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20 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

HM Treasury asserted that this was a similar approach to that it had taken when...

HM Treasury asserted that this was a similar approach to that it had taken when introducing the original schemes in March.54 It told us that, at the height of the initial schemes in the spring, they cost around £10 billion … Read more

Government Response

The government agrees with the recommendation and states it has been implemented, confirming that the Permanent Secretary to the Treasury wrote to the committee on 20 January 2021 outlining how HM Treasury will assess value for money. Revised costs will be set out at the next Budget.

HM Treasury

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21 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

The total cost of the schemes is now estimated to be £76 billion, with OBR...

The total cost of the schemes is now estimated to be £76 billion, with OBR estimating that the extensions to the schemes will add an additional £21 billion to the total. We asked the Departments what calculations they had made … Read more

Government Response

HM Treasury

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22 Recommendation Accepted

Thirty-fourth Report - Covid-19: S…

The condensed timetable for introducing the schemes meant that a lot of the standard documentation...

The condensed timetable for introducing the schemes meant that a lot of the standard documentation that would accompany such a major policy initiative—business cases, options appraisal and detailed cost-benefit analysis—wasn’t undertaken back in the spring.57 HM Treasury asserted that the … Read more

Government Response

The government accepts the recommendation and states it has been implemented, confirming the Permanent Secretary to the Treasury wrote to the committee in January 2021 to outline the value for money assessment approach for the extended schemes. It details ongoing VFM evaluations for both CJRS and SEISS.

HM Treasury

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Government Response AI assessment · 21 of 16 classified

Accepted 13

Accepted in Part 2

Acknowledged 3

Not Addressed 3

Total 16 recs + 6 conclusions

Correspondence 4 letters

15 Sep 2021 Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, re Thirty-Fourth Report of Session 2019-21, dated 19 March 2021

Parliament page

16 Apr 2021 Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, re Thirty-Fourth Report of Session 2019-21, dated 19 March 2021

Parliament page

15 Apr 2021 Correspondence from Tom Scholar, Permanent Secretary, HM Treasury, re Thirty-Fourth Report of Session 2019-21, dated 19 March 2021

Parliament page

26 Jan 2021 Correspondence from Tom Scholar, Permanent Secretary, HM Treasury, re Thirty-Fourth Report of Session 2019-21, dated 20 January 2021

Parliament page