MPs criticise government over ‘opaque’ Covid-19 funding for charities

The House of Commons Public Accounts Committee (PAC) has released the report of its enquiry into the UK government’s financial support for charities during the COVID19 pandemic. The report focuses on over £500m of funding distributed via the Department for Digital, Culture, Media and Skills (DCMS) which holds the brief for charity sector policy. As part of the #NeverMoreNeeded campaign, since March last year DSC has been campaigning for more and better support for vital charity services during the pandemic, and we submitted our own evidence to the committee in April 2021.

The PAC report mirrors many of the conclusions made by the National Audit Office earlier in the year, namely that there was insufficient transparency around the funding, and a lack of robust data about its distribution and impact – even in terms of the geographical location of where funding was awarded, with the PAC concluding that ‘the Department has no information on where in the country 18% of the funds awarded are actually being used, equivalent to £101 million of taxpayer’s money and 2,882 funding awards.’ This is striking, and hard to understand, given the sheer complexity and amount of (often useless) data demanded of applicants by most government grant programmes.

The PAC went even further than the NAO however, in explicitly questioning the value of private sector contractors in providing ‘due diligence’ for the bidding and selection process at a cost of several million pounds and has asked the DCMS for further analysis of the value for money of that contract. The full details and evidence may never come to light, but the anecdotal evidence also suggests that political advisors screened out at least some bidders in some funding programmes, which for whatever reason weren’t considered acceptable, even though they were assessed as eligible and recommended by civil servants.

Alternatively, both the NAO and the PAC raise questions about whether some philanthropists and funders applying to the Community Match Challenge Fund were given preference for unknown reasons, after their applications scored poorly on assessments but were ultimately picked anyway. The DCMS denies any wrongdoing and has said that it followed the rules and ‘proper due process and were in line with the Civil Service Code and the Code of Conduct for Special Advisers’. It’s possible that both things could be true – that favouritism of some kind played a role, and that this was entirely within the rules. A little understood but long-established feature of central government grant-making is that Ministers have the ultimate say over who is successful regardless of what civil servants recommend and can basically pick and choose who gets a grant regardless.

The themes around transparency and data raised by the NAO and the PAC are vital to raise but sadly no surprise to us. We and our colleagues had to resort to multiple FOI requests to get data into the public domain about the rollout of the Coronavirus Community Support Fund, for example. The NLCF’s distribution of that fund – which provided small grants primarily for small charities – was obviously hampered by still undisclosed conditions imposed on it by DCMS from the outset, as well as the totally unnecessary and redundant private sector contractor which DCMS stipulated should be involved in the process. How many additional CCSF small grants could have been awarded out of over £1 million in contracting fees for one of the biggest consulting firms in the country? How many people in desperate circumstances might those grants have helped?

The government will likely want to brush off or just quickly move past this report and we will have to see what if any response the DCMS or its Ministers eventually make to the PAC’s recommendations. So far, this government has a terrible track record of engaging constructively with most normal Parliamentary oversight, but perhaps as we move out of the emergency phase of the pandemic things will begin to improve – we live in hope.

On that note, the PAC’s most important contribution for the future may be its conclusion that ‘DCMS cannot demonstrate that it understands the financial health and resilience of the [charity] sector’, and its recommendation that ‘DCMS should, within three months, set out the triggers that would prompt it to consider further government financial support to the charity sector’.

Throughout our collective meetings and recurring briefings and evidence submissions over the past 18 months, this has been a clear and very problematic theme. Although individual government departments may have functioning working relationships with certain parts of the charity sector, overall, the lack of understanding across Whitehall is extremely poor. Despite the best efforts of charity leaders and civil servants within DCMS, it has degraded over the past decade from a not particularly elevated level in the first place. There is plenty of data, but it isn’t comprehensive or necessarily organised very well, and it’s not often what officials or Ministers say that they want to bolster decision-making internally (which often can be a red herring but is nevertheless a real problem).

The pandemic has exposed the need for better data and evidence about our sector, including not just its financial resilience, but its scope, value and impact, which in turn can help frame the right conversations with government but also the public. This will be a key strand of future work for the charity leadership bodies, their members, and other supporters in civil society, which joined together in the #NeverMoreNeeded campaign and achieved the £750m package in the first place.

Let’s hope Ministers and officials take the PAC’s recommendation seriously and we can work constructively with them to tackle these challenges together for the benefit of society. And to our philanthropists and funders: how about investing more in making better data and evidence happen? There is relatively little funding spent on basic data and research, especially on cross-cutting initiatives about the sector itself, and the funders who do fund that kind of work are few and far between. Yet the future of the charity sector’s role in effective social policy may depend on it – so why not grasp the opportunity?