The Treasury’s secrecy and unwillingness to share analysis across Whitehall departments led to “problematic” government-decision making in response to the Covid-19 pandemic, a report has claimed.
The government’s economic and finance ministry “excelled” in the “broadly successful” economic support schemes but its reticence to sharing research “contributed to decision-making becoming a tug of war”, a report by the Institute for Government (IfG) said.
The report – The Treasury during Covid: What lessons can be learned from the pandemic? – was based on more than 50 interviews and private discussions with current and former government officials and experts.
It said there was a lack of Cabinet Office structures in 2020 to co-ordinate analysis-sharing across Whitehall departments.
This resulted in departments sharing evidence “strategically”, with the Treasury focused on supporting then-chancellor Rishi Sunak to make the economic case for measures and interventions.
The IfG found this helped to perpetuate a “tug-of-war” between the Treasury and health policy-makers in autumn 2020 which fuelled questionable decisions.
For example, the report found an “optimism bias” informed the Treasury’s Eat Out to Help Out scheme, which was out of step with the scientific advisers’ assessment of the risk of a second Covid wave in the summer of 2020.
The creation of a Cabinet Office team to share analysis across government towards the end of 2020 was found to have had a “major positive impact” on decision-making as ministers had access to a common evidence base.
The IfG said the Treasury, like many other departments without a health focus, was not prepared for the pandemic even though they were supposed to have plans in place – albeit based on the risks of a major flu outbreak.
Gemma Tetlow, IfG chief economist, said: “The pandemic brought out both the best and the worst in the Treasury.
“Officials and ministers rose to the enormous challenge of dealing with a crisis of previously unimaginable proportions, preventing a huge rise in unemployment and widespread business failure.
“But the crisis also highlighted existing areas of weakness, particularly in the Treasury’s approach to conducting and sharing technical analysis.”
Olly Bartrum, IfG senior economist, said an effective pandemic response required the Government to consider a wide range of evidence to inform policy that balanced “complex interdependencies” between the spread of Covid and economic behaviour”.
He added: “The Cabinet Office lacked the structures to synthesise evidence effectively until late 2020.“In that environment, the Treasury’s secrecy and inclination towards tactical sharing of information contributed to decision-making becoming a tug of war.”
In a series of recommendations, IfG called for the appointment of a “distinguished” external economist as a chief scientific adviser to the Treasury and the creation of greater incentives for staff to develop stronger technical expertise.
The government should also ensure the Treasury is more “open and collaborative” with other Government departments and the Cabinet Office is strengthened to break down departmental silos, it added.
A Treasury spokesperson said: “During the pandemic the Treasury acted quickly to prevent catastrophic increases in unemployment.
“Without furlough and the other Covid support schemes, millions of people would have lost their jobs and their businesses.“We take note of this report and will set out the Treasury’s position to the official Covid inquiry.”
Additional reporting by PA
