The government’s response to the ongoing coronavirus pandemic – and its impact on businesses – will cost taxpayers up to £123.2bn, according to an updated estimate from the Office for Budget Responsibility (OBR).
That is up from a previous estimate of £103.7bn – with more than half of the increase due to the rising cost of CBILS to pay wages for temporarily laid-off workers across the UK.
The latest figures from OBR show that the level of spending – close to the annual budget of NHS England (£121bn) – has already been used to help thousands of companies.
An OBR statement read: “(Our) database provides initial broad-brush estimates of the costs of various policy interventions. Its coverage is not yet complete and some estimates could be revised materially as administrative data on the use of different schemes are analysed. But on this provisional basis, we estimate that direct impact of new policy measures on cash borrowing in 2020-21 to be £123bn.”
According to OBR, government borrowing could hit £298bn for the current 2020/21 fiscal year. Last month, they estimated it would only be £273bn – showing the drastic rise in the cost of the pandemic.
Last week, Chancellor Rishi Sunak said that from August there would be greater flexibility to allow furloughed staff to start going back to work.
He said: “Employers currently using the scheme will be able to bring furloughed employees back part-time. And we will ask employers to start sharing with the government the cost of paying people’s salaries.”