Mix of policy instruments – in the spring of 2021
Since the outbreak of the pandemic, the state has decided on extensive financial support to the business community. The aim has been to reduce the companies’ costs, strengthen liquidity and improve the companies' financing opportunities. The decisions were initially made under strong time pressure. Based on follow-ups and lessons learned, the mix of subsidies has changed, been improved, and adapted. Our first survey was conducted in the autumn of 2020. The purpose of our surveys is to provide a coherent picture of the type of subsidies that have been initiated and to what cost. With the surveys, we also have the opportunity to make an early assessment of what access to data looks like for future evaluations.
Our surveys include:
- direct financial subsidies to companies
- granting a deferral of companies' payments to the state
- reduced fees or taking over certain costs
- increased opportunities for companies to borrow money
The analysis focuses on:
- how the subsidies have been designed
- how they may have been adjusted
- conditions for being able to carry out follow-ups and evaluations of the subsidies measures
Decisions are made based on great uncertainty
The surveys show that it has been difficult for the government to calculate the extent of the state's costs for the corona - related business subsidies. The government has on several occasions revised its cost calculations. The difficulties have to do with strong time pressure and uncertainty regarding demand and resource needs. It is estimated that the costs for initiated business subsidies landed at SEK 136 billion (Prop. 2020/21: 100) by 2020. In 2021, there are yet no follow-ups available as well as no available information on amounts paid out. The appropriation is currently SEK 50.52 billion for grants and SEK 20.8 billion for reduced fees. In addition, there are extended credit guarantees and loans, expenses that the state expects to be repaid. However, they involve an increased financial risk. Central government costs are likely to increase further. This is because there may be additional extensions and reinforcements of initiated subsidies depending on how the pandemic develops.
Recommendation to make the efforts more evaluable
In order to be able to assess the accuracy of the initiatives, the state needs to clarify the desired effects of the publicly funded initiatives. The efforts also need to be designed in a way that makes them evaluable. Among other things, available and reliable data on:
- Beneficiaries' organization number
- Extent of aid
- Type of intervention and whether the subsidies are corona-related or not
- During which period the subsidies were provided
- Which companies have applied and which have been granted subsidies
Therefore, it is crucial that the authorities managing the grants ensure that there are systems for collecting relevant data that enable evaluations.
Overall picture of targeted support
In Table 1, we summarize all mapped subsidies. The scope is based on the latest available forecasts as of May 15, 2021. Figures in parentheses indicate previous cost calculations. Information on the amount paid out is based on the figures we have received from responsible actors, official websites and presented information in the central government budget which refers to amounts paid out in 2020. For the majority of the subsidies, completely updated information is missing. The total amount therefore indicates only a small part of what the state has actually has paid out.