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July 22, 2021

New pings data suggest £4.6 billion self-isolation cost to the economy following Freedom Day

With Covid-19 cases exploding in recent weeks, so has the number of self-isolation ‘pings’ received by unsuspecting individuals via the NHS COVID-19 app, asking them to isolate for 10 days. This has led to a headache for business owners, many of whom are only now getting their operations back to normal after months of restrictions. In the four weeks between the 19 July ‘Freedom Day’ economic reopening in England and the planned relaxation of self-isolation for those with two vaccine doses on 16 August, Cebr forecasts that pings could cause a loss of over £4.6 billion to the UK economy if no changes to policy are seen. Exemptions introduced for key workers would reduce this cost by only £0.3 billion, whereas more than half could be saved by relaxing isolation for those who have had their second vaccination for at least two weeks.

Last week saw calls for self-isolation rules to be relaxed along with the final step of the government’s roadmap in England from groups. The Confederation of British Industry asked the government to align the unlocking phase with such a relaxation for those who are fully vaccinated with immediate effect. Reports of ping-driven staff shortages have been received loud and clear from employers in the transport, logistics, hospitality, car, and supermarket industries, to name a few. On Monday, the Chief Executive of Iceland announced that 4% of the company’s workforce was currently isolating, forcing temporary store closures and increased recruitment to deal with the shortfall.

Figures released today from the NHS COVID-19 app, covering the period 8-14 July, show a record 607,486 pings within a week in England. During the previous peak, the largest number of weekly notifications was seen in the period 24-31 December 2020, when less than half as many pings were received.

Over the last 4 weeks for which data are available (covering 17 June – 14 July), the app has sent 3.15 pings per Covid-19 case in England. Using the current upward trend in cases (15 days doubling rate), this number is used to forecast the growth of pings in the weeks ahead. The results show that 132,000 pings were likely received on ‘Freedom Day’ alone, with the daily figure set to rise to over 245,000 by 1 August and reaching over 490,000 by 16 August, when the relaxation of self-isolation rules for the fully vaccinated begins. In total, Cebr estimates suggest that over 7.6m people could receive pings over this four-week period.

The costs of self-isolation are largely a function of how many people are able to work from home. An ONS study into homeworking in the UK found that 36.5% of employees had ever worked from home in 2020.[1] Given the lockdowns endured last year, this represents a sound indication of the proportion of people who would be able to work while isolating. This, combined with the fraction of the population who are employed, indicates the number of people whose isolation causes a loss of output. This is estimated to have been 63,000 people on ‘Freedom Day’ and is expected to rise to 117,000 people per day by 1 August, reaching over 233,000 people by 16 August. Over the 4-week period, 3.6 million workers not able to work from home are expected to be requested to isolate.

The cost in lost output from these workers staying in isolation for 10 days is estimated at £102.2 million for pings received on ‘Freedom Day’ alone, a figure that rises to a peak of £227.6 million on 5 August. Pings on subsequent days imply lower costs, as a fraction of the respective workers (those who will be two weeks post full vaccination on 16 August) do not have to isolate for the full 10 days. In total, Cebr estimates a cost of £4.6 billion of lost output for isolation from pings received between ‘Freedom Day’ and 16 August in England. This is equivalent to 0.9% of UK GDP in the first quarter of this year, or 0.2% of total GDP in 2020. Furthermore, if the number of Covid cases increases faster than that of people fully vaccinated after 16 August, the cost will continue to rise.

This week has seen uncertainty over self-isolation exemptions that could be granted to fully vaccinated workers in specific key industries. Cebr estimates that this could cover up to 1.9 million fully vaccinated workers from areas predominantly including healthcare and process operatives, equivalent to 5.7% of all employees. However, exemptions of this scope, even if they had been in place since ‘Freedom Day’, would reduce the cost to the economy by less than £0.3 billion. Narrow exemptions for key workers therefore only scratch the surface of the ‘pingdemic’ cost to the economy.

On the other hand, if the government had relaxed the rules immediately for the fully vaccinated on ‘Freedom Day’, the cost of pings received between then and 16 August would be reduced to just £1.8 billion, representing a 61.6% reduction in the cost to the economy. Even doing so at a delayed date on 23 July would imply a 55.1% cost reduction.

Whilst these estimates do not consider that individuals may be deleting or ignoring their NHS COVID-19 app, the cries of business owners across the UK are becoming louder, indicating a significant problem with the ping system in its current form.

[1] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/homeworkingintheuklabourmarket

For more information please contact:

Karl Thompson, Economist kthompson@cebr.com phone: +44(0)2073242850

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