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Ministers have been urged to boost mental health support amid claims Rishi Sunak’s coronavirus bailout failed to reach people struggling with the financial fallout of the pandemic. 

The chancellor was told on Wednesday that gaps in his emergency wages package – known as the furlough scheme, introduced in March – excluded more than a million people from government help. 

MPs said Sunak has “effectively drawn a line” under aiding more than a million people after Covid-19 hit the UK, due to government small-print and special terms. 

Now, a letter sent by the Lib Dems to Sunak and the health secretary Matt Hancock, call on the government to step up mental health services to support those on the bread line. 

Jamie Stone, a Lib Dem MP and chairman of the all-party parliamentary group for Excluded UK – a group representing a coalition of campaigners including freelancers and those unable to claim support because of childcare – said: “The terrible financial pressure on the millions excluded from financial support is putting tremendous strain on people’s mental health.

“We need action now, not just to support this group financially, but to support the mental health of those affected.

“We are calling on the government to increase funding for mental health support for all groups affected by this pandemic, not least those who are burdened by significant debt.” 

Pressure continues to build on Sunak to extend the Covid-19 support package to a number of groups not covered by the furlough scheme. 

Chairman of the Commons’ Treasury select committee, Mel Stride, has stressed that more than a million people have not received support from the government and called on the chancellor to “do whatever it takes” to protect people and businesses.

In a letter, Sunak admitted to MPs on the committee that it “is correct that some people have not been eligible” for furlough or self-employment scheme funding, while others, such as PAYE freelancers, do not have a specific scheme.

However, the chancellor defended the scheme and said that these “were the right policies for the first phase of the crisis”.

Sunak also said that the Treasury was unable to allow returns for the 2019-20 tax year to be used by people to secure self-employment support as that would create an opportunity for an “organised criminal gang to file fake or misleading returns to claim the grant”.

In response, Stride said: “The chancellor has effectively drawn a line under helping the million-plus people who have been excluded from support for four months.

“Despite stating that he will not pick winners and losers when it comes to sectors and businesses that need support, the chancellor has done this when it comes to households and individuals.

“The chancellor said that the schemes were designed to be open and accessible to as many people as possible, but the committee remains to be convinced that more people could not have been helped.

“The chancellor initially told those at risk of losing their livelihoods that they would not be forgotten.

“While the government is clear that it is moving on to the next phase of its recovery plan, it cannot just turn its back on those who are suffering.” 

The committee continues to urge the government to rethink its position.