Why Hasn’t the Government Published a Cost-Benefit Analysis of Lockdown?

When considering a policy as unprecedented and far-reaching as a nationwide lockdown, you’d assume the Government would carry out a cost-benefit analysis. After all, such analyses are routine in policy-making. 

For example, the Treasury maintains a document called ‘The Green Book’, which gives detailed guidance on how to compute the costs and benefits of particular actions. It refers to concepts such as opportunity costdiscount factors and adjusting for inflation.

You might say there wasn’t much time to carry out a detailed cost-benefit analysis before the first lockdown last March. (Though the Government could have provided a few rough numbers for the public to scrutinise.) However, it’s now more than a year later, and there still hasn’t been any attempt to weigh the costs and benefits.

In a report for the Institute of Economic Affairs published last December, the economist Paul Ormerod argued that the Government’s refusal to crunch the numbers reflects a general overreliance on epidemiological expertise, at the expense of economic expertise. 

As Russ Roberts, another economist, has observed, “Knowing a lot about the human body does not make you an expert in risk analysis, tradeoffs, or unintended consequences.” Note: this is not to imply that all or even most economists are opposed to lockdowns, but simply that key insights from that discipline have been overlooked during the course of the pandemic. 

Several cost-benefit analyses of the UK lockdowns have been published by persons outside the Government, and each one has concluded that the costs almost certainly outweighed the benefits. 

Since the NHS typically pays up to £30,000 to extend a patient’s life by one quality-adjusted life-year, a reasonable estimate of the benefits of lockdown can be obtained by multiplying the expected number of life-years saved by 30,000. 

For example, if we assume (generously) that lockdowns saved 50,000 lives and prevented 500,000 people from getting long COVID, then the total benefits would be about £16.5 billion. This figure then has to be weighed against some measure of the costs (including effects on the economy, health, education and civil liberties). Given that the fall in GDP alone last year was over £220 billion, it seems very unlikely that lockdowns would pass a cost-benefit test.

The Government’s lack of interest in cost-benefit analysis was highlighted in a recent LinkedIn post by Daniel Fujiwara – an expert in policy evaluation. Fujiwara was apparently invited to “meet with senior Government officials to discuss the pros and cons of lockdown”. However, despite offering his advice and input pro-bono, he “never heard back from them”. 

In the post, Fujiwara goes on to say, “Lockdowns should have stopped at the point where an additional day of #lockdown causes more damage to our society than it benefits us… My analysis of the impacts of lockdown last year suggests that we have gone well beyond this threshold.” 

One can only assume that the Government’s failure to publish even basic estimates of the costs and benefits of lockdown is due to fear of what those estimates might show…

Even in Ferguson’s Worst Case Scenario, the Cost of Saving One Life From Covid is a Million Pounds

We’re publishing an original piece today by Glen Bishop, the second year maths student at Nottingham University who often writes for Lockdown Sceptics about the shortcomings of the models that SAGE has relied on throughout this crisis. In this piece, he does a back-of-the-envelope calculation to work out how much it has cost the Government to save one life from Covid. Not surprisingly, it is considerably more than the £30,000 per Quality Adjusted Life Year that is the upper limit in the guidance the NHS relies upon when deciding how to allocate resources. Here is an extract:

Financially, the test for rationality of a response to public health is the one used, until the Covid hysteria, by the NHS and the National Institute for Health and Care Excellence (NICE). NICE is the body that decides whether treatments, technologies and medicines are beneficial enough to warrant their cost. The upper limit the NHS and NICE are willing to pay for a treatment yielding one extra quality adjusted life year (QALY) is £30,000. If £30,000 is the accepted limit that can sustainably be spent by society on giving an individual one extra quality year of life, then have lockdowns met this test? Even with Ferguson’s projections, they aren’t even close.

As mentioned, using the 500,000 deaths projection would lead to 372,000 lives having been saved. Conveniently the National Audit Office puts the cost of measures announced by the government by the end of March at £372bn. That would be, as readers will notice, £1 million per life saved. But again, taking QALYs lost per Covid death of seven years gives £143,000.

This is a cost per year of life nearly five times more than the £30,000 the Government previously deemed an upper limit for what was reasonable and sustainable to spend on treatments such as that for children’s cancer medication. Is it the Government’s or Professor Ferguson’s position that protecting somebody from Covid is worth spending five times more than protecting someone from cancer or do they not understand the realities of the policies they are implementing?

Worth reading in full.