As the £376 billion cost of Covid was revealed, Rishi Sunak issued a warning that he would not lavish money on wage increases for public sector employees.
After the Treasury instructed Whitehall departments that any additional salary increases must be funded from current budgets, the Chancellor emphasized the need to be “responsible” with the public finances.
The intervention happened at the same time as the government’s budget watchdog released its most recent report on the cost of the pandemic response.
The staggering figure is now £376 billion, with an additional £4 billion added recently to maintain emergency bailouts for train operators this year. The government claims that the 7% salary increase the rail unions are demanding is unaffordable, so they are on strike.
New numbers indicating the government borrowed £14 billion in May and that interest payments on the £2.4 trillion debt mountain reached a record £7.6 billion due to surging inflation also shed light on the government’s precarious financial situation.
During the spending review in November, Mr. Sunak made provisions for salary increases of around 3%, but at the time, it was anticipated that inflation would generally remain at the same level this year. The current estimate is more than twice that.
The Times claims that ministers have been informed there will be “no additional money” for raises in pay.
Speaking in response to the numbers released today about the public finances, Mr. Sunak stated: “Rising inflation and rising debt interest expenses pose a burden for the public finances, as they do for family budgets.
That is why we are adopting a balanced strategy, utilizing our financial firepower to provide targeted assistance with the expense of living while staying on schedule to reduce debt.
Since we can protect our economy in the long run by managing the public finances responsibly now, future generations won’t have to deal with even greater debt repayments.
The figure has increased by £6 billion since September, reaching a total of £376 billion, according to the National Audit Office’s Covid final update to its costs tracker.
The entire estimated cost of company support, including furloughs and the Bounce Back Loan program, was the highest at £147 billion, a decrease of £7 billion from September.
Spending on health and social care is projected to total close to £89 billion, which is £5 billion more than originally planned.
The pandemic has had a catastrophic effect on people’s life, according to Meg Hillier, chair of the Public Accounts Committee. The cost of the government’s COVID initiatives is close to £400 billion, despite the incalculable human cost.
Many of these actions will have long-term financial repercussions.
In order for the taxpayer to hold the government accountable for how their money is spent, it is essential that COVID spending be made public.