Fifth Report - COVID-19: Government Support for Charities

Select Committee

Public Accounts Committee HC 250 9 June 2021

Report Status Government responded

Conclusions & Recommendations 19 items (7 recs)

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Government Response (AI assessment · 19 of 19 classified)

Accepted 11

Accepted in Part 1

Acknowledged 2

Deferred 1

Not Addressed 3

Rejected 1

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Fifth report from Session 2021-22 · published 2 Sep 2021

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Recommendations & Conclusions

11 results

2 Recommendation Accepted

We are not convinced that the Department’s decisions about how to allocate funds were sufficiently...

Recommendation

We are not convinced that the Department’s decisions about how to allocate funds were sufficiently transparent. The Department asserts that in order to help it work at pace it decided to involve special advisers in preparing its advice to Ministers … Read more We are not convinced that the Department’s decisions about how to allocate funds were sufficiently transparent. The Department asserts that in order to help it work at pace it decided to involve special advisers in preparing its advice to Ministers on which charities should receive funding. We did not receive a satisfactory response to our questioning around how the code of conduct for special advisors was applied in this instance given that part of the role is to reinforce “the political impartiality of the permanent civil service by distinguishing the source of political advice and support”. However, the Department could not adequately explain the role taken by special advisers or the safeguards put in place during what it admits is an unusual form for funding discussions. In particular, the Department is unclear as to why special advisers met with officials after the assessment of bids from other government departments had been completed or how those discussions influenced the advice given to Ministers. The level of influence exerted by special advisers and their involvement at the point of decision making appears to go beyond what we have previously seen as Members of this Committee or in our previous Ministerial roles. Similarly, the Department is unable to adequately explain how four organisations whose bids were initially given the lowest ranking scores succeeded in securing funding as Community Match Challenge partners, meaning the Department matched the amounts fundraised by these organisations. The Department also could not clearly explain why the Zoo Support Fund received funding intended for vulnerable people, particularly when the Department for Environment, Food and Rural Affairs already has a separate Zoo Animals Fund in place and many zoos are 6 COVID-19: Government Support for Charities businesses rather than charities. The Department, however, told us that Ministers took the decision to allocate money to zoos because of concerns about the welfare o Show less

Government Response Summary

The government agrees on the importance of appropriate record-keeping and asserts that decisions were properly recorded, civil service codes upheld, and special advisers operated correctly within frameworks for funding allocations.

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3 Recommendation Accepted

The Department cannot explain the additional benefit it has received from its contract with a...

Recommendation

The Department cannot explain the additional benefit it has received from its contract with a professional services firm to perform due diligence on charity applications to The National Lottery Challenge Fund (TNLCF). TNLCF is an organisation that is experienced in … Read more

Government Response Summary

The government agrees, defends the value for money of the PwC contract by stating performance metrics were met, commits to assessing future professional services engagements thoroughly, and provides an update on post-event fraud assurance.

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4 Recommendation Accepted

The Department cannot demonstrate how its funding decisions have benefited charities and will not be...

Recommendation

The Department cannot demonstrate how its funding decisions have benefited charities and will not be able to do so until it completes is evaluation of the funding at the end of 2021. The Department has a limited understanding of the … Read more The Department cannot demonstrate how its funding decisions have benefited charities and will not be able to do so until it completes is evaluation of the funding at the end of 2021. The Department has a limited understanding of the impacts of the funding on vulnerable groups and communities. Initial evaluation work conducted by TNLCF, which distributed £188 million through the CCSF, found that 75% of charities said that the funds enabled them to reach people that they had not worked with previously. The Department asserts that charities who had either religious or moral objections to accessing funds through the TNLCF, because of its links to gambling, were still able to benefit through other elements of the funding package, such as the Community Match Challenge scheme. However, the Department has no information on where 18% of the funds awarded are being COVID-19: Government Support for Charities 7 used, equivalent to £101 million of taxpayers’ money and 2,882 funding awards. The Department admits that it does not have all the information it would like about the regional distribution of funds, in part because sometimes the geographical location of a charity’s headquarters is not the place where the money is spent. Initial results on the outcomes that are being achieved by the TNLCF appear positive. Four in five of those who have received funding report that it has helped them deliver improvements to mental health, and almost two in three said that it has enabled them to improve social connections. The Department is currently procuring an evaluation to understand the impact of the full funding package, which it expects to be available by the end of 2021. Recommendation: The Department should, within three months, write to us to explain the criteria it will use to assess the impact of the funding. It should, by the end of December 2021, write to us with the outcome of the evaluation, ensuring this exercise represents charities that did not receive funding as well as Show less

Government Response Summary

The government agrees and outlines the main objectives and criteria for its evaluation of the funding impact, which includes assessing effectiveness, usage, and lessons learned, with an overall outcome due by December 2021.

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6 Conclusion Accepted

We questioned the Department about how it decided which bids from other government departments it...

Conclusion

We questioned the Department about how it decided which bids from other government departments it would provide funding for. Special advisers were invited to discuss the initial assessments from the Department’s officials before final advice was given to Ministers.15 Correspondence … Read more

Government Response Summary

The government asserts that existing procedures and codes of conduct for civil servants and special advisers were followed correctly in funding decisions, with proper records kept and appropriate distinctions maintained between impartial and political advice.

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7 Conclusion Accepted

Given our concerns that this was an unusual process, the Department contended that it was...

Conclusion

Given our concerns that this was an unusual process, the Department contended that it was not different from the normal process by which advice was offered to Ministers. The Department, however, was unable to offer further examples of when such … Read more

Government Response Summary

The government agrees with the 'recommendation' and states that appropriate records of decisions are always kept. It confirms the Permanent Secretary was satisfied that civil servants and special advisers followed the Civil Service Code, and decisions were properly recorded within the DCMS IT system.

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9 Recommendation Accepted

We also asked about the decision-making process around awards for the Community Match Challenge scheme,...

Recommendation

We also asked about the decision-making process around awards for the Community Match Challenge scheme, where the Department match funded the amounts raised by philanthropic groups, foundations and grant-making organisations. Ministers selected twenty organisations to receive funding, including seven out … Read more

Government Response Summary

The government agrees on the importance of appropriate record-keeping and asserts that proper processes were followed, confirming relevant information is recorded and staff are regularly reminded of their duties regarding record-keeping.

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10 Recommendation Accepted

The Department reduced the funding allocation to TNLCF from £310 million to £200 million around...

Recommendation

The Department reduced the funding allocation to TNLCF from £310 million to £200 million around one week before it was due to start distributing funding.33 When asked why this was the case, the Department told us that it was due … Read more

Government Response Summary

The government agrees with the implied recommendation and commits to undertaking a project to review and improve evidence and data on the charity sector's financial health, with an update expected within three months.

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11 Conclusion Accepted

The Department paid £2 million in 2020–21 to a professional services firm, PwC, to provide...

Conclusion

The Department paid £2 million in 2020–21 to a professional services firm, PwC, to provide support on grants and operations, including checks on awards made by TNLCF for the Coronavirus Community Support Fund (CCSF).38 We asked why this additional support … Read more

Government Response Summary

The government agrees with the conclusion, explaining that consultants were contracted due to the emergency nature of the pandemic and that performance metrics were met. It states that DCMS will continue to assess any future proposals for professional services on a case-by-case basis, adhering to Cabinet Office guidance and internal assurance processes.

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12 Conclusion Accepted

We have found in our reports on the government’s response to the COVID-19 pandemic, that...

Conclusion

We have found in our reports on the government’s response to the COVID-19 pandemic, that the need to act at speed can reduce transparency and increase the risk of fraud and error. In our report examining Government procurement and the … Read more

Government Response Summary

The government agrees with the 'recommendation' and states that appropriate records of decisions are always kept. It asserts that the DCMS Permanent Secretary was satisfied civil servants and special advisers followed relevant codes, and funding decisions were properly made and recorded. It also confirms it continues to remind staff about their duties and the importance of record keeping.

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13 Recommendation Accepted

By February 2021, the Department had identified 76 fraudulent applications, 70 of which had resulted...

Recommendation

By February 2021, the Department had identified 76 fraudulent applications, 70 of which had resulted in awards. The Department estimated that up to £614,000 had been distributed to fraudulent applicants and had reported cases equivalent to £400,000 to the police. … Read more

Government Response Summary

The government agrees with an implied recommendation on fraud management and provides an update on post-event assurance for fraud and error across the financial support package, stating 88% of cases are complete with a report expected by August 2021.

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14 Conclusion Accepted

The Department has not yet evaluated whether the funding package has met its objectives of...

Conclusion

The Department has not yet evaluated whether the funding package has met its objectives of supporting vulnerable people and relieving pressure on frontline services during the pandemic. It explained that it was in the process of procuring an evaluation and … Read more

Government Response Summary

The government agrees and details the objectives of its ongoing evaluation of the funding package, aiming to understand whether it achieved its aims, how grants were used, and to draw out lessons. The CCSF impact and value for money evaluation reports are due to be published at the end of summer 2021.

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