The high cost of the National Citizen Service cannot be justified, the organisation that runs it is not sufficiently transparent and its participation targets remain challenging despite being significantly reduced, a committee of MPs has concluded.
A report from the House of Commons Public Accounts Committee on the £1.5bn programme says the government and the NCS Trust, which runs the scheme, cannot justify the seemingly high cost per participant of the scheme.
It says the expected cost per participant in 2016 was £1,863, more than £300 higher than the 2015 spending review settlement allowed.
The committee says this figure should fall to at least £1,649 per participant in order for the scheme to grow to its desired size and remain within its budget.
It says that although the trust has benchmarked some costs against private sector comparators, it failed to do so against similar voluntary sector youth organisations "which provide input at a much lower cost".
It notes that the Scout Association estimates that it costs £550 to create a place in the scouts that last at least four years.
The report says the trust and the Department for Culture, Media and Sport should develop a robust and complete NCS cost model and publish benchmarking of its costs before the next round of commissioning places in 2018.
The government has committed £1.5bn to the scheme between 2011/12 and 2019/20, £600m of which has already been spent, with £900m in the pipeline.
The government revised its targets for the scheme downwards after the National Audit Office warned in January that they could be missed by 40 per cent at existing growth rates.
The participation target was reduced from 360,000 young people in 2020/21 to 247,000.
But the PAC’s report says even this revised target appears to be hard to attain.
"The new target still requires an increase in the rate of participant growth from 17,000 to 38,500 more participants each year, and so remains very challenging," it says.
It says the NCS Trust, which runs the scheme, has adopted a one-size-fits-all approach to rolling out the scheme and should be more creative about the options for how the programme will be delivered.
The report says the NCS Trust "has not met the standards of transparency to be expected from organisations funded almost entirely by the taxpayer".
It says that there were salary increases and other figures in the trust’s annual report that could not be explained by Michael Lynas, chief executive of the NCS Trust, who appeared before the committee at an evidence session last month.
"This lack of knowledge of the finances concerned us," the report says.
The National Citizen Service Bill, which is going through parliament, will make the trust a public body so that it will be obliged to comply with higher transparency standards, the report says.
"But there is no reason why it cannot, in the spirit of openness and transparency, publish additional disclosures in the meantime, and we were concerned by the trust’s apparent reluctance to do so," it says.
The report is also critical of the trust’s "relaxed attitude" to the recovery of about £10m of funding that was paid to providers in 2016 for places that were not filled.
Meg Hillier, chair of the PAC, said in a statement that the government’s assertion that the scheme had had a positive impact on the young people who had taken part "does not in itself justify the level of public spending on the programme, nor demonstrate that NCS in its current form will deliver the proposed benefits to wider society".
Lynas said the report recognised that the NCS had had a positive impact on 300,000 young people so far.
He said achieving value for taxpayers’ money was "of central concern" to the trust and independent research showed that every £1 invested in the scheme returned between £2.20 and £4.15 of benefit to society.
He said the trust was always seeking to strengthen the NCS and shared the committee’s view that it was vital to measure the long-term impact of the programme.
"NCS is the fastest -growing youth programme in our country for 100 years," he said.
"As the NCS bill makes its way through parliament with cross-party support, we are transitioning to be a royal charter body with the appropriate governance, systems and processes to match our scale."