State spent €17.1bn on Covid-19 response in first year of pandemic

The State spent €17.1 billion in response to Covid-19 during the first year of the pandemic up to the end of February 2021, according to the annual report from the State’s spending watchdog, the Comptroller and Auditor General.

Spending by four Government departments – Social Protection; Health; Enterprise, Trade and Employment; and Housing – accounted for 90 per cent of the year-long spending.

Some €11.1 billion was paid out in welfare supports through the Department of Social Protection, including €6.1 billion on pandemic unemployment payments. A further €4.8 billion was spent on the two wage subsidy schemes supporting businesses hurt by the Covid-19 pandemic.

This comprised €2.7 billion on temporary wage subsidy scheme (TWSS) and €2.1 billion on the employment wage subsidy scheme (EWSS). Individuals were the biggest recipients of the Covid-19 expenditure, receiving €6.3 billion, while businesses received €6.1 billion.

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Covid-19 spending by the Department of Health topped €2.7 billion in the year, including €920 million on personal protective equipment, €600 million on supports for hospitals and nursing homes and €292 million testing and tracing.

The watchdog also disclosed in his annual report that the State was facing more than 230 legal claims arising from the CervicalCheck scandal, including 44 cases being taken by family members of women affected for alleged psychological injuries.

The number of claims against the Health Service Executive over the controversy has increased from 134 in 2019 to 234 by the end of last year, the report states.

There were 12 CervicalCheck claims concluded last year, bringing the total concluded to 22. Of those, 19 cases were settled, one was subject to a court judgment, and two were dropped.

Mediation was offered in 17 of these cases and took place in 12 of them, according to the report.

Tribunal alternative

The auditor’s report notes a CervicalCheck tribunal has been in operation since December 2020, “as an alternative system to the courts for processing claims arising”. However, the tribunal only received a tiny number of claims in the months after it was set up.

The controversy over the screening programme emerged after Limerick woman Vicky Phelan, who has cervical cancer, settled a High Court action in April 2018 over the incorrect reading of her smear test. It later emerged that more than 100 other women had not been informed of an audit that had revised their earlier, negative smear tests.

The report stated the handling of claims made against private hospitals used by the State during Covid-19 had been delegated to the State Claims Agency, as well as any claims against private companies assisting the Covid-19 testing programme.

Overall, awards and costs arising from legal cases against the State amounted to €430 million last year.

The estimated cost of settling outstanding claims has been “steadily increasing” in recent years.

The current total liability had been estimated at €4 billion, more than 3½ times the State’s legal liabilities recorded at the end of 2012.

There were 12,175 claims currently being managed by the State Claims Agency at the end of 2020, with more than 3,000 resolved last year, it said.

Health sector bodies, such as the HSE, Tusla and the Department of Health, accounted for 92 per cent of pending legal liabilities, it said.

Overturned on appeal

Among the other areas examined by the watchdog, the C&AG found that decisions to refuse people social welfare allowances were overturned in 55 per cent of cases where people appealed.

The Department of Social Protection processed two million welfare claims last year, just over 1 per cent of which were subject to appeals.

The C&AG noted that more than 40 per cent of appeals related to two welfare schemes: disability allowance and carer’s allowance.

About 26,000 appeals were finalised last year, a fifth more than the previous year. It said the overall number of appeals on hand “reduced significantly” during 2020.

The report said the department “significantly exceeded” a target to review appeal cases within three weeks, taking on average 8.8 weeks to send a case to the appeals office.

In the C&AG's examinations of the State's budgetary watchdog, the Irish Fiscal Advisory Council, it referred to a OECD review recommendation that its budget should be "safeguarded in real terms", which could require new legislation. At present its budget was linked to inflation, "but wages and other costs have risen faster", the review found.

The council received funding of €787,000 in 2020.