The Week, 29 April 2022

29 April 2022
By Charlotte Pickles
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Pestminster overtook partygate this week as Parliament once again returned to the spotlight for its “toxic” work environment. But as ever, much more has happened in Westminster than the headlines might suggest...

First up, on Wednesday the Public Accounts Committee published a report on the Covid Bounce Back Loans Scheme (BBLS), and for anyone who cares about taxpayer money it’s a pretty rage-inducing read. Quick recap: the loans were introduced as part of the Government’s economic package designed to protect businesses and jobs; and as with all the schemes it was introduced with (impressive) speed and undoubtedly did make a significant difference (keeping the economy in deep freeze rather letting it go into complete meltdown). 1.5 million loans were made, totalling £47 billion, and most were made within the first 2 months of the scheme.

But. And it’s a huge, unforgivable ‘but’, the PAC report exposes massive failures by the Department for Business, Energy and Industrial Strategy (BEIS) to put in place basic taxpayer protections.

BEIS estimates losses of £17 billion from the Scheme, of which £4.9 billion will be due to fraud. Losses should be accepted, it was an emergency measure aimed at saving businesses, but given the extent of the lockdowns and restrictions imposed, some of those businesses were still going to fail. However PAC points out that the Department itself admits that “fraud within the Scheme falls well outside what it would consider a tolerable level”, though they couldn’t say what level that would be.

You may recall Lord Agnew resigned from his ministerial post at the end of January in part due to his anger over the handling of fraud: “The oversight by both BEIS and the British Business Bank of the panel lenders of the BBLS has been nothing less than woeful”; “Schoolboy errors were made”; “a combination of arrogance, indolence and ignorance freezes the government machine”. Damning stuff.

There are three failures, highlighted in the report, worth particular note. Firstly, basic fraud checks were not required — for example, was the company actually trading pre-pandemic, or was their turnover as claimed in their loan application?

Second, while moral hazard is baked in when the Government pledges to cover 100% of lender losses, not requiring at least a minimum of action by the lender to recover the loan is madness, so is not requiring them to pursue payment beyond 12 months.

And third: the complete failure to take seriously the need to invest in countering fraud. PAC states that “just £32 million” was set aside, and calls on the Government to identify how much is actually needed in order to deliver a proper counter-fraud strategy. Hear, hear!

Also on Wednesday, think tank Civitas published an international health care outcomes index, drawing on the methodology previously used by the Health Foundation, IFS, King’s Fund and Nuffield Trust for a 2018 report on the topic (data is from 2019). More miserable reading I’m afraid: while UK spending on health matched the average of comparator countries, on the outcomes measured, the UK generally performed worse (diabetes indicators are the exception). On the most important indicator, treatable mortality — i.e. deaths than could have been avoidable through healthcare — we ranked 15th out of 16 countries.

Finally, yesterday the Health and Social Care Committee published a timely report on NHS litigation, which cost the NHS over £2 billion last year, and is set to double over the coming decade. The Committee argues that while reducing harm is clearly important, “snowballing costs” are in fact the result of the approach, rather than decreasing patient safety. Instead of the current, highly adversarial model, the MPs call for a “radically different system for compensating injured patients which moves away from a system based on apportioning blame and prioritises learning from mistakes”. That would be in everyone’s interests.

Ahead of the long weekend, here are this week’s recommended reads...

First up is a Financial Times article (£) on the huge growth in crowdfunding campaigns to cover private healthcare costs: “cases include people suffering from debilitating hereditary disorders, career-derailing injuries and various forms of cancer, and all of whom feel the NHS is unable to meet their needs”. We in the UK are now paying almost as much on out-of-pocket healthcare as our US counterparts, and, according to the FT analysis, the biggest jump in private spending has been among the lowest earning fifth of the population. At Reform we have for some time been arguing that healthcare is effectively rationed in the UK, and the most disadvantaged are being hit the hardest by unacceptably long wait lists. This report from the FT shows — again — just why an urgent rethink is needed.

Second (actually published at the end of last week), ahead of the local elections next week, the Local Government Information Unit has published polling on attitudes to the elections, the work of councillors and the role of local government. 65% of people said they usually vote in local elections, yet just 44% say they know ‘a great deal’ or ‘a fair amount’ about the work of local councillors or how decisions are taken in local government. Despite this, people are most likely to say councils have the ‘most impact’ on people’s lives (32% versus 29% for Parliament). Of a long list of issues, the condition of roads and pavements was the most popular for prioritisation (above health, education, housing and jobs).