Covid-19
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Public spending

The 12-month stretch

Where the Government has delivered – and where it has failed – during the Covid-19 crisis

Torsten Bell
Torsten Bell
Mike Brewer
Mike Brewer

As we reach the anniversary of the UK’s first lockdown, this note explores the past 12 months of the pandemic through the health crisis, the economic crisis, and their impact on households’ ability to cope financially. It takes a step back, considering the big picture of what policy makers have done, how well they have done it, and where it’s left people, both in terms of health and economic outcomes.

We find that the past year has been marked by big successes on income support and vaccines, but repeated failures on lockdown that have cost lives and deepened the economic crisis, and left a legacy of inequality that needs to be addressed in the recovery.

Key findings

  • The UK was the first country to start a clinically-approved vaccination programme on 8th December, and is delivering jabs three times faster than Europe, giving 25 million people their first dose, and is on course to vaccinate all adults aged 50 and over by early April.
  • Over £186 billion in emergency Covid-19 support has directly supported households and firms – via the furlough scheme, benefits uplift and grants for companies and the self-employed – and means that typical household incomes have remained flat during the past year and firm insolvencies have actually fallen, despite the economy experiencing its biggest contraction in over 300 years.
  • Delaying the start of the latest lockdown until January, despite evidence of fast rising cases, is estimated to have led to around an extra 27,000 Covid-related deaths compared to a situation in which restrictions were put in place quickly enough to prevent the death rate rising from early December levels.
  • Delays to lockdowns also meant that they have subsequently had to be tighter and longer lasting, leaving the UK to experience among the most stringent restrictions of all G7 economies over the past year.
  • Poorer households have borne the brunt of the health and economic crises. Recent mortality rates in the most deprived parts of England have been almost twice those in the least deprived areas.
  • Although aggregate savings have surged during the crisis as restrictions have prevented higher income households from spending on social consumption, the poorest fifth of households are 50 per cent more likely to have seen their savings deteriorate rather than rise during the crisis.
  • The poorest fifth of households are also twice as likely to have seen their debts rise rather than fall during the crisis. In contrast, the richest fifth of households are twice as likely to have seen their debts fall rather than rise.

 

Further reading

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