Coronavirus Account (3rd edition)

This third web report on the Coronavirus Account looks at the latest changes in the budgets for 2020, as set out in amended interim budgets and in the 2020 Autumn Memorandum.1

The recent upsurge in the pandemic prompted the government to announce a raft of additional support measures in October and November. The existing package of measures for supporting the economy and the labour market was extended at the end of October. This included temporarily extending the scheme for the reimbursement of fixed costs for SMEs (known as the TVL scheme) to all branches of trade and industry, and announcing that both the hotel and catering industry and the events industry are now eligible for extra support. One of the measures included in the Autumn Memorandum was also to defer a number of projected expenditure items to 2021.

Just like the previous edition (only in Dutch),  this third edition analyses the use made of the various financial support schemes. Because we have not included the outcome figures for October, we cannot for the time being measure the impact of the second lockdown on the take-up of the support measures. This publication is based on all the outcome figures for the period ending on 30 September 2020.

This report paints a broad picture of the schemes currently in operation. The accompanying interactive dashboard contains more detailed information on specific measures and the relevant budget chapters. The monitor will be updated and extended at regular intervals.

https://www.rijksoverheid.nl/documenten/kamerstukken/2020/11/30/najaarsnota-2020 [Dutch only]

1. Trend in projected expenditure and current position

It is clear from the most recent adjusted budget for 2020, i.e. the Autumn Memorandum, that the government is expecting to spend some €31.4 billion on mitigating the consequences of the coronavirus crisis in 2020.

The following figure shows the effect of the latest changes in budgeted expenditure for 2020, as set out in the Autumn Memorandum. Following an initial decrease in the level of projected spending between July (when the figure stood at €39.6 billion) and September (€34.1 billion), the Memorandum indicates that there will be a further decrease in projected spending as of December 2020 (€31.4 billion). Writing in the Autumn Memorandum, the government makes clear that this decline is due to its decision to defer certain items of expenditure to 2021.

COVID-19-related expenditure in 2021 is currently estimated at €14.4 billion. This brings the aggregate amount of projected expenditure on COVID-19-related support schemes in the budgets for 2020 and 2021 to €45.8 billion.1 The government has now adopted a total of 179 measures

(28 June: €42.9 billion, 7 October: €45.2 billion)

(28 June: 136 measures, 7 October: 176 measures)

Figure 1: Projected expenditure in the 2020 budget year. Position in July, September and December 2020

Figure 1: Projected expenditure in the 2020 budget year. Position in July, September and December 2020 (in € 1 billion)
MonthExpenditures
July39.61
September34.09
December31.44
Source table as .csv (65 bytes)

Spending on support schemes (in 2020 and 2021)

The bulk of the budgeted expenditure is projected to go towards social and economic support schemes. These include grants, income transfers, tax relief and guarantees. In terms of financial value, the NOW scheme (a temporary job retention scheme) is the biggest support scheme in the three social and economic support packages launched by the government. Projected spending on the three versions of the NOW scheme accounts for the bulk of aggregate COVID-19-related support (viz. 40%). Each of these three versions features in the following table, which lists the 10 leading support schemes by value. We have audited government policy on preventing the abuse and improper use of the first two versions of the NOW scheme. Our audit team found that, although the Minister of Social Affairs and Employment and the Employee Insurance Agency (UWV) had together analysed the risks of abuse, these had not been fully mitigated.

Other big spending tickets are to be found in the care sector, including the purchase of medical equipment (€1.7 billion), the provision of testing capacity (€2.3 billion) and the bonus for care workers (€3 billion).

This is the balance of €1.8 billion in expenditure in 2020 and €146,000 in projected revenue in 2021.

Figure 2: Top 10 targets of spending on support in 2020 and 2021

Figure 2: Top 10 targets of spending on support in 2020 and 2021 (in € 1 billion)
Nametotal amount
First version of NOW job retention scheme8.67
Third version of NOW job retention scheme5.41
Second version of NOW job retention scheme5.29
Bonus for care workers2.97
Testing capacity at National Institute for Public Health and the Environment and Municipal Health Services2.3
Temporary bridging scheme for self-employed professionals (TOZO scheme)2.15
Second version of scheme for the reimbursement of fixed costs for SMEs (TVL scheme)1.83
Purchase and distribution of medical equipment1.66
Public transport availability payment1.32
Support for KLM1
Source table as .csv (589 bytes)

Figure 3 shows the projected level of aggregate spending on the three versions of the NOW job retention scheme between July and December 2020. The original projections for spending on both the first and the second versions of the scheme were revised downwards.5 Projected spending on the first version of the scheme was revised from €9.5 billion in April to €8.7 billion in December, while projected spending on the second version was revised from €12.7 billion in July to €5.3 billion in December. Spending on the third version of the NOW scheme is projected at €5.4 billion. The third version will last longer than both the previous versions, i.e. from 1 October 2020 to 30 June 2021.

As far as the first version of the NOW scheme is concerned, figures published by Statistics Netherlands show that €7.9 billion worth of advance payments have been made to date.There are two reasons for the downward revisions of the spending projections: firstly, less use has been made of the scheme, and secondly, certain items of expenditure have been carried over to 2021. By way of comparison, 6.5% of Dutch businesses made use of the first version of the NOW scheme, whereas only 2.9% made use of the second version of the scheme.7

5 First version of NOW scheme: 1 March-31 May 2020; second version of NOW scheme: 1 June-30 September 2020.

6 https://www.cbs.nl/nl-nl/maatwerk/2020/46/gebruik-van-steunmaatregelen-corona-per-30-september

7 https://www.cbs.nl/nl-nl/maatwerk/2020/46/gebruik-van-steunmaatregelen-corona-per-30-september

Figure 3: Projected spending on the NOW scheme in 2020 and 2021. Position in July, September and December 2020.

Figure 3: Projected spending on the NOW scheme in 2020 and 2021. Position in July, September and December 2020. in € 1 million
MaandContribution towards cost of implementationNOW 1.0NOW 2.0NOW 3.0NOW 1.0 - Caribbean NetherlandsNOW 2.0 - Caribbean NetherlandsNOW 3.0 - Caribbean Netherlands
July550797812686.70000
September218.058666.458805290.9000
December2418666.452905408131626
Source table as .csv (288 bytes)

The Employee Insurance Agency has published detailed figures on the use made of the first and second versions of the NOW scheme.8 These show the amount of support made available to individual companies. The following figure shows that KLM received the most money in both versions of the scheme.

8 https://www.uwv.nl/overuwv/pers/uwv-documenten/index.aspx; https://now-inzichtelijk.nl/

Figure 4.1: The 10 leading beneficiaries of the first NOW scheme.

Figure 4.1: The 10 leading beneficiaries of the first NOW scheme. (in € 1 million)
V1amount
KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V.293.41
NS REIZIGERS B.V.53.28
BOOKING.COM B.V.44.09
HOLLAND CASINO N.V.31.89
DAF TRUCKS N.V.28.26
SCHIPHOL NEDERLAND B.V.27.81
TATA STEEL IJMUIDEN B.V.27.61
TEMPO-TEAM UITZENDEN B.V.24.71
TRANSAVIA AIRLINES C.V.24.27
GVB EXPLOITATIE B.V.20.52
Source table as .csv (314 bytes)

Figure 4.2: The 10 leading beneficiaries of the second NOW scheme.

Figure 4.2: The 10 leading beneficiaries of the second NOW scheme. (in € 1 million)
V1amount
KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V.285.43
TATA STEEL IJMUIDEN B.V.37.87
SCHIPHOL NEDERLAND B.V.30.62
TRANSAVIA AIRLINES C.V.25.94
HOLLAND CASINO N.V.25.85
DAF TRUCKS N.V.20.5
ATOS NEDERLAND B.V.13.11
QBUZZ B.V.12.33
ADECCO HR SOLUTIONS B.V.11.17
VDL NEDCAR B.V.10.77
Source table as .csv (303 bytes)

Expenditure in each budget chapter (in 2020 and 2021)

A number of budgets projected a lower level of expenditure for December than for September. The lower level of projected spending in the budget for the Ministry of Social Affairs and Employment stems primarily from the downward revisions of NOW grant payments. The lower figure in the Ministry of Finance budget is due to the fact that less use was made of the supply credit reinsurance guarantee scheme than had been expected (the level of spending was adjusted from €1 billion to €240 million). The measures taken in response to the second wave of new coronavirus infections have led to a higher expenditure figure in the budget for the Ministry of Health, Welfare and Sport, with more money set aside, for example, for the purchase of medical equipment (the amount budgeted has risen from €1.6 to €1.8 billion) and for testing capacity (an increase from €551 to €929 million). Medical equipment is purchased by a national consortium, to which the Ministry of Health, Welfare and Sport has made advance payments of €1.8 billion and to which it has also given an unlimited guarantee (see the summary of our audit report entitled ‘The coronavirus crisis: the risks posed to public finances by guarantees and loans’). Earlier this year, we examined the operation of the testing chain during the spring of 2020. The popularity of the bonus for care workers (for which many more requests have been received) has led to a higher level of projected expenditure for 2020 than had been anticipated in September, i.e. €2 billion instead of €1.3 billion. The amounts budgeted for the development and purchase of vaccines and drugs are €123 million in 2020 and €635 million in 2021.

Figure 5: Expenditure in each budget chapter, July-December, 2020 and 2021

Figure 5: Expenditure in each budget chapter, July-December, 2020 and 2021 (in € 1 billion)
Budget ChapterJulySeptemberDecember
Social Affairs and Employment25.8525.3124.51
Health2.877.359.48
Economic Affairs and Climate Policy4.284.984.98
Finance2.712.581.43
Infrastructure and Water Management1.331.331.33
Education0.831.231.24
Agriculture0.841.070.89
Municipalities Fund0.520.821.01
Kingdom Relations����0.370.40.65
Foreign Trade and Development Cooperation0.150.140.14
The Interior0.070.080.15
Foreign Affairs0.010.010.01
Bonaire, Sint Eustatius and Saba Fund00.010.01
Defence000
Justice and Security000
Source table as .csv (587 bytes)

Expenditure on individual measures

While grants (such as under the NOW job retention scheme) and income transfers (such as under the TOZO scheme for self-employed professionals) are the main tools used for providing support during the coronavirus crisis, the government has also made use of guarantees and loans, alongside other forms of support. Although guarantees are a form of insurance that triggers expenditure only when invoked, ministers are obliged to insure that the maximum value of the guarantees provided is included as an obligation in their budgets.

The State of the Netherlands has provided guarantees in the context of 14 COVID-19-related risk schemes in recent months, the bulk of which relate to support for businesses and the care sector. According to the Autumn Memorandum, the aggregate value of these guarantees now stands at €64.9 billion. The total value of outstanding loans is €1.8 billion. There is a risk to the government that these loans may not be repaid in full. One of the findings of our audit set out in our report entitled Coronacrisis: de risico’s van garanties en leningen voor de overheidsfinanciën (‘The coronavirus crisis: the risks posed to public finances by guarantees and loans’; the report is available in Dutch only)  was that ministers have not consistently adhered to the rules laid down several years ago in connection with the provision of risk-based government support.

Figure 6: Current level of risk exposure and use made to date of Covid-19-related guarantees

Figure 6: Current level of risk exposure and use made to date of Covid-19-related guarantees (in € 1 billion)
GuaranteeUsedRemaining
Next Generation EU (NGEU)027.4
Supplier Credit Reinsurance120
Business Finance (temporary coronavirus arrangement) Guarantee Scheme (GO-C)0.597.91
SURE06.07
SME Credit Guarantee Scheme (BMKB)0.772.6
KLM (guarantee)02.16
Business Finance (standard) Guarantee Scheme (GO)0.071.75
National consortium for the purchase of medical equipment (LCH)1.650
Pan-European Guarantee Fund (EIB)01.3
Small Coronavirus Loans (KKC) Guarantee Scheme0.040.67
Poverty Reduction and Growth Trust (IMF)00.62
Testing equipment0.110.12
Growth facility0.010.21
Agricultural Guarantees (temporary coronavirus arrangement) (BL-C)0.050.13
Eurofirns00.17
Synlab00.12
U-Diagnostics00.02
Dutch Hospital Pharmacists' Association drugs00.02
source: Autumn Memorandum Source table as .csv (789 bytes)

When the government announced an additional package of support and recovery measures at the end of October, a number of guarantee schemes (such as the Business Finance Guarantee Scheme and the Small Coronavirus Loans Guarantee Scheme) were extended until 30 June 2021. The Extended SME Credit Guarantee Scheme was extended to the end of 2021. These extensions, taken together with a number of new guarantees (i.e. Eurofins, Synlab, testing equipment and U-Diagnostics), have led to a rise in the aggregate value of outstanding guarantees compared with the position in September. The end of September was the reference date for our audit report referred to above on the risks associated with guarantees and loans.

Alongside general support provided, for example, through the various NOW job retention schemes, KLM and IHC have also received individual support in the form of loans and guarantees. During the period from March until the end of August of this year, four companies received €3.5 billion worth of support. A number of other companies had their requests for support turned down. One of the findings set out in our audit report entitled Individuele steun aan bedrijven tijdens de coronacrisis (‘Individual support for companies during the coronavirus crisis’) is that ministers generally made use of lessons learned from the past. 

2. Use made of social and economic support measures

Figures published by Statistics Netherlandsshow that some 500,000 businesses have made use of the various support measures to date (reference date: 30 September 2020). This number is equivalent to 29% of the total number of businesses in the Netherlands. The majority of these businesses have received support under the TOZO scheme for self-employed professionals, the TOGS scheme for businesses in sectors affected by Covid-19, and in the form of the deferral of tax payments. The same data also show that 40% of businesses that made use of the first version of the NOW scheme also made use of the second version, and that 18% of the users of the TOGS scheme applied for support under its successor scheme, the TVL scheme for the reimbursement of fixed costs for SMEs.

9 https://www.cbs.nl/nl-nl/maatwerk/2020/46/gebruik-van-steunmaatregelen-corona-per-30-september

Figure 7: Number of businesses making use of financial support schemes

Figure 7: Number of businesses making use of financial support schemes
Amount
First version of TOZO scheme210240
TOGS scheme194635
Deferred taxation185830
First version of NOW scheme120955
TVL scheme58650
Second version of NOW scheme54085
Qredits8060
SME Credit Guarantee Scheme (BMKB-C)3725
Coronavirus Bridging Loan scheme (COL)1370
Business Finance (temporary coronavirus arrangement) Guarantee Scheme (GO-C)]55
Data: Statistics Netherlands Source table as .csv (366 bytes)

Figure 8: Amount budgeted for each financial support scheme (in €m,

Figure 8: Amount budgeted for each financial support scheme (in €m, (in € 1 billion)
Amount
Deferred taxation8.73
First version of NOW scheme7.89
Second version of NOW scheme3.6
TVL scheme0.83
TOGS scheme0.81
Business Finance (temporary coronavirus arrangement) Guarantee Scheme (GO-C)]0.52
SME Credit Guarantee Scheme (BMKB-C)0.45
Coronavirus Bridging Loan scheme (COL)0.41
Qredits0.18
Data: Statistics Netherlands (The amount quoted for ‘deferred taxation’ is the amount of taxation due for which a deferment has been granted) Source table as .csv (322 bytes)

2021 budget year

As we said at the beginning, spending on support measures in 2021 is now projected to total €14.4 billion, whereas the amount budgeted at the time when the budgets for 2021 were presented was €11.2 billion. The difference is due in part to the government’s decision to carry forward the payment of NOW grants to next year and also, to a small part, to a higher level of expenditure on the TOZO and TVL schemes. Of the amount originally budgeted for public transport availability payments (viz. €1.3 billion), €500 million has been deferred to 2021. The budget for the Ministry of Health, Welfare and Sport shows a higher level of projected expenditure on testing capacity (approximately €1 billion) and the development of vaccines (€335 million).

In Conclusion

We are planning to publish a new updated version of this report on Accountability Day, i.e. 19 May 2021, in which we will be looking back on the year 2020. We will be updating our interactive Coronavirus Account dashboard