Fears are mounting that Rishi Sunak's £9bn furlough bonus scheme will be a "waste" of public money as experts warn it won't stop mass layoffs.
The Chancellor faces fury over his pledge to give firms £1,000 for each furloughed worker they don't sack by January 31.
The "job retention bonus" was the most expensive single pledge in yesterday's £30bn mini-Budget.
Yet the government's own officials and the respected IFS think tank both warn it may not be value for money.
Even Mr Sunak admitted today there will be "dead weight" - money going to firms that would keep or sack workers regardless.
The Chancellor said: "Without question there will be dead weight - and there has been dead weight in all of the interventions we have put in place".
He was slammed by Labour's Chief Secretary to the Treasury Bridget Phillipson.
She said: "The Chancellor just admitted that his job retention bonus risks wasting taxpayer money.
"It’s not brave to admit plans to waste billions at a time when many are crying out for support.
"He should be targeting support to those who need it, not handing it out to those who don’t."
Under the scheme, firms will claim £1,000 in February for each previously-furloughed worker they still had on the payroll by January 31.
To qualify, employees must be paid at least £520 a month on average between November and January.
But even employees who were only furloughed for a few weeks, and are already back, will still qualify.
Meanwhile, there is nothing to stop bosses sacking people after January 31.
Treasury officials refused to give the scheme the green light without Mr Sunak's personal direction - because they couldn't guarantee it'll be value for money.
Permanent Secretary Jim Harra said it was "entirely appropriate" for the top Tory to make a judgement - but added: "The advice that we have both received highlights uncertainty around the value for money of this proposal.
"I am unable to reach a view that this represents value for money to the standards expected".
If every one of the 9.4million workers who've been furloughed at some point stay in a job, it will cost the Treasury £9.4bn.
But IFS director Paul Johnson said "probably a majority" of the bonus money will go to jobs that would have been returned from furlough regardless.
He added: "This money will go even in respect of jobs which were briefly furloughed, are already back at work, can expect to be still back at work in January - and the employer still gets £1,000."
IFS deputy director Robert Joyce said it was “inevitable” a lot of the money will be dead weight.
“That may well be the inevitable effect of this policy," he said.
"Rather than actually changing the numbers employed that dramatically over that period, it will largely just be a transfer to firms that are bringing back workers from furlough, but would have done that anyway - or have already done so.”
Even where the bonus does help people keep their jobs, he said it might just "push the problem back" and delay redundancies to next Spring.
Ryan Shorthouse, director of Conservative think tank Bright Blue, said: "Some of the new support seems poorly targeted.
"It seems unlikely that a £1,000 payment to employers for retaining each furloughed employee will be a strong enough incentive to keep people on the payroll."
Chancellor Rishi Sunak admitted his schemes were not perfect - but said he only had limited time to draw them up.
He told BBC Radio 4's Today programme: "Throughout this crisis I've had decisions to make and whether to act in a broad way at scale and at speed or to act in a more targeted and nuanced way.
"In an ideal world, you're absolutely right, you would minimise that dead weight and do everything in incredibly targeted fashion."
But the IFS also warned "much" of the VAT cut for pubs and theme parks, and the cut to Stamp Duty, will also be "dead weight" and not stimulate the economy.
“Much of the VAT cut and the Stamp Duty cut will be dead weight, but that may be fine if they have a significant behavioural consequence," Mr Johnson said.
IFS Deputy Director Helen Miller added the 50% off scheme for restaurants on Mondays, Tuesdays and Wednesdays in August is a "poorly targeted giveaway".
She said: "Customers might benefit through lower prices.
"But the kinds of people who are going out aren’t necessarily those who’ve been most badly affected by the crisis."