The Treasury has confirmed it still needs to spend a further £5bn on Covid-19 measures, more than four years after the final lockdown restrictions were lifted.
The additional spending brings the total estimated cost to taxpayers to £385bn, according to a cost tracker update published on Thursday by the government.
The government said it had already spent £380bn on Covid-19 support since the pandemic first broke out in 2020, representing an enormous financial burden on public finances.
More than £80bn of total Covid-19 funds were spent by the government’s health department, with nearly £50bn spent directly by the Treasury.
The update, which was the first since a publication in 2023 and is expected to be the last, lays bare the full scale of pandemic costs to British taxpayers.
Previous estimates indicated the government spent around £96.9bn on employment and Business schemes, including furlough payments that covered 11.7 million individual jobs.
Several grants and loans were also issued to employers and entrepreneurs, while billions of pounds were lost to fraud and error through loan schemes and personal protective equipment supplies.
The Treasury also disclosed that Covid-19-related spending was £11.4bn higher than previously estimated, driven by NHS cost settlements, credit losses from loan schemes, and resources allocated to a vaccine taskforce.
Chancellor Rachel Reeves had centred her economic pitch on reclaiming lost taxpayer funds when Labour were in opposition, though the government has so far recouped only around £400m.
Public debt as a share of GDP stood at around 84 per cent before rising sharply to 94 per cent, briefly peaking above 100 per cent in the period following the pandemic.
Debt interest payments to the government’s lenders leaped from under £40bn before the pandemic to more than £110bn in the last financial year, placing significant strain on public finances.
The tax burden is now projected to reach a post-World War II high, reflecting the lasting fiscal damage caused by successive waves of emergency spending.
After the pandemic, the then-Conservative government spent around £75bn on energy support in response to the price shock caused by Russia’s full-scale invasion of Ukraine, according to the Institute for Fiscal Studies.
The furlough scheme has also drawn criticism from some economists, with former shadow chancellor Ed Balls writing in an academic paper that it weakened the UK labour market’s dynamism in the long-term.
Researchers at the Tony Blair Institute have said the welfare bill would be £11.5bn lower had incapacity benefit claimant numbers remained at pre-pandemic levels, highlighting the pandemic’s hidden fiscal legacy.