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

Select Committee
Public Accounts Committee HC 920 20 December 2020
Report Status Government responded
Conclusions & Recommendations 22 items (16 recs)
Source View on Parliament website
Government Response (AI assessment · 21 of 22 classified)
Accepted 13
Accepted in Part 2
Acknowledged 3
Not Addressed 3
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Thirty fourth report from Session 2019-21 · published 25 Mar 2021
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Recommendations & Conclusions

22 results
2 Recommendation Accepted
The age of the Self Assessment system made it more difficult for HMRC to provide...
Recommendation
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 Summary
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
The Departments have not done enough to reduce the number of people excluded from the...
Recommendation
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 Summary
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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4 Recommendation Accepted in Part
The Departments did not evaluate the schemes or identify which the groups they support before...
Recommendation
The Departments did not evaluate the schemes or identify which the groups they support before extending them. Both the schemes have been extended due to the prolonged impact of the pandemic, but the Departments have not yet produced evaluations of … Read more
Government Response Summary
The government accepted the recommendation, stating HMRC already monitors and publishes statistics including age and gender. It committed to collecting new primary research on jobs outcomes and will evaluate the schemes, with the evaluation aiming to include employment impact, although specific monthly reporting on all protected groups was not explicitly stated.
HM Treasury
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5 Recommendation Accepted
The Departments will not know the actual levels of fraud and error within these schemes...
Recommendation
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 Summary
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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6 Recommendation Not Addressed
Too much chopping and changing of the new schemes has created uncertainty for the UK...
Recommendation
Too much chopping and changing of the new schemes has created uncertainty for the UK nations, regions and businesses, regarding financial support and job security. Nations, regions and businesses, as well as their employees, need as much certainty as possible … Read more
Government Response Summary
The government response discusses the Bounce Back Loan Scheme and its features, entirely failing to address the committee's recommendation regarding providing clarity and forewarning for employment support arrangements.
HM Treasury
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7 Recommendation Accepted
We are concerned that HM Treasury is unable to explain how much the extended schemes...
Recommendation
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 Summary
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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1 Conclusion Not Addressed
On the basis of a report by the Comptroller and Auditor General, we took evidence...
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury and HM Revenue & Customs (HMRC) about the employment support schemes that they have established since the start of the covid-19 pandemic.1
Government Response Summary
The government's response is entirely unrelated to the committee's introductory statement about employment support schemes, instead discussing cash access and related legislation.
HM Treasury
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8 Conclusion Acknowledged
HMRC used the data in its Self Assessment system to calculate how much self- employed...
Conclusion
HMRC used the data in its Self Assessment system to calculate how much self- employed people would receive as part of the SEISS grant award. However, this was developed in the 1990s and lags behind other countries’ systems. HMRC told … Read more
Government Response Summary
The government acknowledges the committee's conclusion regarding the age and limitations of the Self Assessment system, outlining its commitment to the Making Tax Digital programme as part of its 10-year Tax Administration Strategy to enhance understanding of the international landscape.
HM Treasury
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9 Conclusion Not Addressed
HMRC’s investment in its RTI system meant that, unlike SEISS, eligibility for CJRS was based...
Conclusion
HMRC’s investment in its RTI system meant that, unlike SEISS, eligibility for CJRS was based on more up-to-date data. The RTI system is used on a monthly basis by employers to submit tax information on their workforce to HMRC. HMRC … Read more
Government Response Summary
The government states that HMRC utilized its existing Real Time Information and Self Assessment systems for tax data, but does not address the committee's concern about the increased risk of employers misstating their positions.
HM Treasury
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10 Recommendation Accepted
The extension of both schemes was announced in November 2020.
Recommendation
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 Summary
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
We asked whether the Departments had undertaken any evaluation on the regional differences in take-up...
Recommendation
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 Summary
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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12 Recommendation Accepted
HMRC’s initial planning assumptions suggested that the level of fraud and error would be 5%...
Recommendation
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 Summary
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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13 Conclusion Acknowledged
As many as 2.9 million people may have been excluded from the first versions of...
Conclusion
As many as 2.9 million people may have been excluded from the first versions of CJRS and SEISS. The NAO found that people were excluded either because of policy design choices or due to constraints in the tax system. An … Read more
Government Response Summary
The government acknowledges the committee's conclusion regarding the millions excluded from CJRS and SEISS. It explains the rationale for eligibility criteria based on available HMRC data and notes efforts to extend support to some groups, as well as future plans through the 10-year Tax Administration Strategy to use real-time data.
HM Treasury
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14 Conclusion Acknowledged
We were concerned that the extension to SEISS could leave more self-employed people without support...
Conclusion
We were concerned that the extension to SEISS could leave more self-employed people without support than the initial scheme. HMRC based eligibility for the initial SEISS on tax return data up to 2018–19 and estimated, as part of initial planning … Read more
Government Response Summary
The government acknowledges the committee's concern about SEISS exclusions and data limitations for the newly self-employed. It reiterates the rationale for scheme design based on available HMRC data and highlights ongoing efforts through the 10-year Tax Administration Strategy to develop a real-time digital tax system.
HM Treasury
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15 Recommendation Accepted
Two further groups that were largely excluded from support were freelancers and owner-managers of companies.
Recommendation
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
Government Response Summary
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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16 Recommendation Accepted in Part
The initial CJRS scheme was due to end on 31 October 2020.
Recommendation
The initial CJRS scheme was due to end on 31 October 2020. In September, the government announced that it would be replaced by a Job Support Scheme (JSS) that would top up the wages of workers working at least one-third … Read more
Government Response Summary
The government agrees with the recommendation and commits to providing as much clarity and forewarning as possible, citing a CJRS extension announcement. However, it qualifies this by stating that certainty must be balanced with responsiveness to the evolving pandemic.
HM Treasury
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17 Conclusion
We noted that a large number of business, particularly within more restricted areas, had not...
Conclusion
We noted that a large number of business, particularly within more restricted areas, had not been able to operate normally for many months. While support for businesses is expected, it is essential that government provides this money as quickly as … Read more
HM Treasury
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18 Recommendation Accepted
Employees who were let go after 23 September 2020 can be rehired and furloughed again...
Recommendation
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 Summary
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
We asked the Departments how much they expected the extended furlough scheme and the SEISS...
Recommendation
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 Summary
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
HM Treasury asserted that this was a similar approach to that it had taken when...
Recommendation
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 Summary
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
The total cost of the schemes is now estimated to be £76 billion, with OBR...
Recommendation
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 Summary
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. Revised costs will be set out at the next Budget.
HM Treasury
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22 Recommendation Accepted
The condensed timetable for introducing the schemes meant that a lot of the standard documentation...
Recommendation
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 Summary
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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