The government has “no information” on where more than £100m in emergency Covid-19 support for charities has been spent and has failed to provide a clear rationale for spending millions of pounds on consultants to help in the assessment of applications, a group of MPs has concluded.
The committee has been conducting an inquiry into £513m allocated to the Department for Digital, Culture, Media & Sport to provide financial support to help charities meet increased demand during the pandemic.
The sum was part of the £750m emergency funding package to help voluntary sector organisations during the pandemic, announced in April last year.
The committee found that the DCMS had no information on where £101m of funds awarded were being used – equivalent to 18 per cent of the total awarded, or 2,882 applications.
It also found that there had been “a notable opaqueness over some aspects” of the department's decision-making.
In addition, the committee said it was unclear why some charitable organisations succeeded in securing funding: in three instances officials were unsure whether organisations were actually “eligible for government funding in the first place”.
The DCMS also “failed to provide a clear rationale for spending up to £2m of taxpayers’ money on consultants to assist with the assessment of bids, when established processes were already in place to do this”.
The government defended the £2.3m contract with PwC to provide operational and administrative support to the DCMS Civil Service team, and said it came from the department’s core budget, not the emergency support.
The government also said the vast majority of work to administer this funding was undertaken by DCMS civil servants and by The National Lottery Community Fund, and that its arrangement for consultancy services was in line with usual practice.
The department said it entered into a separate contract with PwC worth just under £1m, following a competitive process, to provide administrative support to the £16.5m Youth Coronavirus Support Fund.
The report notes that the DCMS acted quickly to pay out most of its £513m financial support package for the sector, which allowed many charities to continue to provide vital services to some of the most vulnerable in society, and reduce pressure on services elsewhere.
But this focus on speed, the committee said, meant the department had not developed a way to measure the impact this “taxpayers’ investment” has had on the sector.
While it was clear the fund was not intended to support or save every charitable organisation, the committee said it “remains concerned about the long-term financial health and resilience of the sector as the pandemic continues”.
It advised DCMS to monitor that situation and update the committee on what further action it will take.
Meg Hillier, chair of the Public Accounts Committee and Labour MP for Hackney South and Shoreditch, said: “The PAC has seen these twin themes recur throughout the policy response to Covid-19, especially when it comes to disbursing funds.
“One is a worrying smoke thrown up around award decisions, with growing instances of the official processes overridden without adequate explanation.
“The other is the focus on inputs, not outcomes, on getting money spent – including exorbitant amounts on consultants – without factoring or measuring the impact.
“I fear one clear impact is the steady erosion of taxpayers’ trust that their money is being well spent in this national emergency."
A government spokesperson said all decisions on this funding followed proper due process.
“All decisions were made by ministers based on advice from officials and special advisers did not unduly influence this in any way," the spokesperson said.
"External grant and fund management support allowed the department to meet tight deadlines and safely distribute funds across the full package of support offered."