Coronavirus lockdown: Costs and benefits

On 28 July 2020, Baroness Neville-Rolfe (Conservative) is due to ask the Government, “what plans they have to ensure that in the future fuller account is taken of the economic costs of any measures adopted to address the Covid-19 pandemic such as lockdowns”.  

In her question, Baroness Neville-Rolfe refers to a paper by academics Professor David Miles, Mike Stedman and Dr Adrian Heald on the costs and benefits of the lockdown. The paper argues that the costs of extending the “severe restrictions” of the lockdown for three months are likely to have been greater than the benefits. These costs might include the economic effects of the restrictions, as well as implications for physical and mental health, missed education, domestic violence and rising inequalities. The authors argue that they increased more than proportionately to the length of the lockdown. On the other hand, the benefits, in the form of reduced infections and deaths, may have diminished over time. 

The authors use economic techniques to compare these costs and benefits directly. They recognise that such comparisons are difficult, and may appear distasteful, but argue that they are necessary to guide public policymaking. 

What is the lockdown? 

The Prime Minister, Boris Johnson, announced the beginning of the UK lockdown on 23 March 2020. There have been several sets of changes to the restrictions since, with some enshrined in legislation and some framed as guidance. This sometimes led to different approaches in England, Scotland, Wales and Northern Ireland. However, the key elements of the lockdown across the UK during the pandemic have included: 

  • social distancing; 
  • restrictions on gatherings; 
  • closures of premises;  
  • stay at home, self-isolation and shielding; 
  • face coverings; and 
  • travel restrictions. 

The Prime Minister said that the measures were necessary to ensure that the NHS could cope during the pandemic, and therefore to reduce the number of deaths both from coronavirus and from other causes. 

Comparing the costs and benefits of lockdown 

In their June 2020 paper, academics David Miles et al compared the benefits and costs of lockdown. They argued this analysis was essential, despite its inherent difficulties. They stated: 

Bringing together costs and benefits is necessary if good policy decisions are to be made. There is no simple way to do this that is clearly ethically justifiable, empirically reliable and widely accepted. But to make no assessment is just to make policy in a vacuum. 

In their analysis, Miles et al used the technique of comparing quality-adjusted life years (QALYs). For example, the lockdown may have prolonged lives that would otherwise have been cut short by coronavirus, leading to a positive contribution of QALYs. However, if it led to lower quality of life or deaths that would not otherwise have occurred (for reasons set out below), this would lead to a negative contribution of QALYs. The overall balance would determine whether, in cost-benefit terms, the policy was worthwhile.

The authors acknowledged that “many will feel uneasy at such calculations”. However, they defended the approach, saying that “there are implications in terms of deaths and misery on both sides of the ledger from any policy. To think such comparisons are distasteful is to not face that reality”.

The authors also recognised that the full costs and benefits of the lockdown will not be known for “many years” and that the measurement of costs was “profoundly difficult”. Again, however, they argued that the exercise should be attempted to guide current policy. 

Benefits 

Considering the benefits of lockdown, Miles et al said that it “significantly” reduced the rate of new infections and deaths from coronavirus, although the exact extent of the impact was “unclear”. They reported estimates of how many additional deaths from the virus there would have been without the lockdown restrictions. These estimates ranged from “very few” to 450,000. However, the authors believed that figures at either extreme of this spectrum were “implausible”. 

government report published in April also attempted to estimate the number of additional deaths not directly caused by the virus, with and without the lockdown. It said that without the measures there might have been “large numbers” of deaths, possibly exceeding 1 million, resulting from pressures on urgent services in the health and care system. This compared with an estimate of 185,000 over the medium and longer term with the lockdown, which would be reduced if cases are reprioritised on returning to normal. 

The government report also considered the possibility of further deaths from pressures on non-urgent care, the economic effects of the crisis and the effects of the lockdown measures themselves. However, it was unable to quantify these effects. 

Costs 

Miles et al gave examples of the costs of the lockdown, including: 

  • Direct economic costs, such as falls in economic activity and higher government debt. 
  • Company closures. 
  • Higher unemployment, which could have “very substantial” longer-term effects and may be “particularly severe for young people”. 
  • Impacts on non-virus health conditions, such as missed treatments for cancer and missed screenings for serious health conditions, potentially leading to earlier deaths. 
  • Impacts on mental health, which are potentially “large and long-lasting”. 
  • Lessons missed at schools and universities. 

Others have pointed to an increase in domestic violence and evidence that policy measures will increase inequalities in the UK.  

Commentators have also suggested that the costs of lockdown can reinforce each other. For example, the closure of schools may lead to mental and physical health problems in children, while increases in unemployment can lead to substantial increases in chronic health problems in the working age population. 

Results 

Overall, Miles et al did not oppose the lockdown, but argued that it may have been extended for too long in a blanket form. The authors concluded that “the costs of a three-month lockdown are likely to have become high relative to benefits”. The authors stated that although there was uncertainty in the estimates, this result followed from considering “a wide range of scenarios”. 

The authors argued this conclusion on the basis that costs “plausibly rise more than in proportion to the length of a lockdown”. In other words, the costs over two months are more than twice as bad as those over a month. In contrast, they suggested that the benefits of a lockdown may diminish over time. 

Turning to current policy, the authors said that “while there are inevitably risks in easing restrictions there are very clear costs in not doing so”. They called for “normalising” public policy around coronavirus, rather than treating it “as if little else matters”. As a result, they said that the Government should move away from blanket restrictions and “towards measures targeted specifically at groups most at risk”. They added that this approach “should probably have been started before the end of June 2020”. 

Latest government position 

On 17 July, the Prime Minister set out how the Government was moving from general to targeted measures: 

When we set out our plan to rebuild on 11 May, we said our goal was to return life to as close to normal as possible, for as many people as possible, as fast and as fairly as possible, in a way that is safe and continues to protect our NHS. 

That goal remains the same—but the tools we use to achieve it are changing. At the start of the pandemic, when we knew far less about the nature and spread of the virus, we had to take blanket, national measures. National lockdown was undoubtedly the right thing to do and has saved many thousands of lives. 

Now however, we know more about the virus […] That means we can control it through targeted, local action instead. 

Read more 

Image by Matt Seymour on Unsplash.