Select Committee · Public Accounts Committee

Covid-19: Government support for charities

Status: Closed Opened: 1 Feb 2021 Closed: 5 Aug 2021 7 recommendations 12 conclusions 1 report

On 8 April 2020, HM Treasury announced £750 million of funding support to help frontline charities continue to operate during the coronavirus outbreak . On 20 May, the Department for Digital, Culture, Media & Sport (DCMS) and the Office for Civil Society announced that they were working across government to direct funds to voluntary, community … Show more

Reports

1 report
Title HC No. Published Items Response
Fifth Report - COVID-19: Government Support for Charities HC 250 9 Jun 2021 19 Responded

Recommendations & Conclusions

19 items
2 Recommendation Fifth Report - COVID-19: Government Sup… Accepted

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

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 … Read more

Government response AI 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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HM Treasury
3 Recommendation Fifth Report - COVID-19: Government Sup… Accepted

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

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 distributing funding, which formed part of the justification by the … Read more

Government response AI 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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HM Treasury
4 Recommendation Fifth Report - COVID-19: Government Sup… Accepted

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

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 … Read more

Government response AI 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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HM Treasury
5 Recommendation Fifth Report - COVID-19: Government Sup… Rejected

The Department cannot yet demonstrate that it fully understands the financial health and resilience of...

The Department cannot yet demonstrate that it fully understands the financial health and resilience of the charity sector or whether further government financial support will be necessary. The funding covers the period up until the end of March 2021 and any unspent funding will be returned to HM Treasury. The … Read more

Government response AI summary
The government rejects the recommendation to set out definitive triggers for further financial support to the charity sector, stating that assessment must be based on a range of sources, but commits to setting out for the Committee the range of evidence used for such assessments.
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HM Treasury
1 Conclusion Fifth Report - COVID-19: Government Sup… Not Addressed

On the basis of a Report by the Comptroller and Auditor General, we took evidence...

On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department for Digital, Culture, Media and Sport (the Department), The National Lottery Community Fund (TNLCF) and The Charity Commission on the government’s £750 million funding to charities during the COVID-19 pandemic.1 We also … Read more

Government response AI summary
The government response provides background information on its £750 million financial support package for charities during the COVID-19 pandemic, detailing allocated and paid-out amounts across various schemes, rather than addressing the committee's procedural statement.
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HM Treasury
6 Conclusion Fifth Report - COVID-19: Government Sup… Accepted

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

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 from the Department showed that in the meeting to discuss … Read more

Government response AI 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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HM Treasury
7 Conclusion Fifth Report - COVID-19: Government Sup… Accepted

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

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 an arrangement has been used.23 Nor was it able to … Read more

Government response AI 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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HM Treasury
8 Conclusion Fifth Report - COVID-19: Government Sup… Not Addressed

The Department provided £30 million of funding to the Department for Environment, Food and Rural...

The Department provided £30 million of funding to the Department for Environment, Food and Rural Affairs (DEFRA), with £7 million allocated to the Zoo Support Fund.27 We asked the Department why the allocation to DEFRA to support zoos came from funding designed to support charities helping the vulnerable during the … Read more

Government response AI summary
The government provides a general defense of its funding allocation processes and adherence to civil service codes but does not address the committee's specific concern regarding the appropriateness of allocating funds from a charity support package to zoos.
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HM Treasury
9 Recommendation Fifth Report - COVID-19: Government Sup… Accepted

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

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 of the ten highest scoring applications. All four of the … Read more

Government response AI 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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HM Treasury
10 Recommendation Fifth Report - COVID-19: Government Sup… Accepted

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

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 to the fact that Ministers wanted more flexibility in how … Read more

Government response AI 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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HM Treasury
11 Conclusion Fifth Report - COVID-19: Government Sup… Accepted

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

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 had been needed and how the Department ensured that it … Read more

Government response AI 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 …
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HM Treasury
12 Conclusion Fifth Report - COVID-19: Government Sup… Accepted

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

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 supply of Personal Protective Equipment, we found that Government had … Read more

Government response AI 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 …
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HM Treasury
13 Recommendation Fifth Report - COVID-19: Government Sup… Accepted

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

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. The remaining £214,000 were still under investigation. The Department estimated … Read more

Government response AI 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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HM Treasury
14 Conclusion Fifth Report - COVID-19: Government Sup… Accepted

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

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 was aiming to produce a report before the end of … Read more

Government response AI 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 …
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HM Treasury
15 Conclusion Fifth Report - COVID-19: Government Sup… Acknowledged

The National Lottery Community Fund (TNLCF) told us that it undertook regular surveys of customers...

The National Lottery Community Fund (TNLCF) told us that it undertook regular surveys of customers who were accessing its funding. TNLCF explained that 77% of its customers rated their experience between eight and 10 out of 10, with 10 being the highest score; and 75% of respondents noted that as … Read more

Government response AI summary
The government acknowledged the committee's observation about planned evaluations, confirming that a process evaluation was published in July 2021 and impact/value for money reports were due at the end of summer 2021.
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HM Treasury
16 Conclusion Fifth Report - COVID-19: Government Sup… Not Addressed

The National Audit Office found that the information available on the geographical distribution of funding...

The National Audit Office found that the information available on the geographical distribution of funding was at times inconsistent or missing, making it difficult to determine the geographical spread of funding awarded. At 19 February 2021, the Department held no information on where funds were being used for 18% of … Read more

Government response AI summary
The government states that CCSF grant funding was distributed to every region and almost every local authority in England, with indicative regional funding allocations identified from the outset. It does not address the committee's finding regarding missing or inconsistent data on geographical distribution.
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HM Treasury
17 Conclusion Fifth Report - COVID-19: Government Sup… Accepted in Part

The Department told us that its intention was that the overall funding provided would be...

The Department told us that its intention was that the overall funding provided would be of “significant assistance [to the sector] even if it wasn’t able to cover every gap” and that it understood that “charities would have to make difficult decisions” as a result of the pandemic.54 It said … Read more

Government response AI summary
The government agrees and will provide an update on actions to monitor the charity sector's financial health and resilience. DCMS is undertaking a project with partners to review and improve evidence and data concerning the health of the charity and social enterprise sectors, and plans …
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HM Treasury
18 Conclusion Fifth Report - COVID-19: Government Sup… Acknowledged

The Department recognised that charities had lost traditional sources of income during the pandemic, such...

The Department recognised that charities had lost traditional sources of income during the pandemic, such as fundraising through large events like the London Marathon and the closure of charity shops. However, it also suggested that moving fundraising online may have increased overall funding levels. In addition, the Department highlighted that … Read more

Government response AI summary
The government agrees and will set out current actions to monitor the charity sector's financial health. DCMS is undertaking a project with partners to review and improve data availability on the sector's health and resilience, considering options for better data use and collection, with an …
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HM Treasury
19 Conclusion Fifth Report - COVID-19: Government Sup… Deferred

We asked about the impact of the pandemic on the financial health of the sector...

We asked about the impact of the pandemic on the financial health of the sector as a whole. The Charity Commission told us that a range of indicators suggest that charities’ finances were worsening. It explained that the number of auditor reports on matters of material significance, that highlight a … Read more

Government response AI summary
The government agrees with the committee's observation and commits to undertaking a project with partners to review and improve the evidence and data available on the financial health and resilience of the charity sector, with options under consideration for better data utilization and collection.
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HM Treasury

Oral evidence sessions

1 session
Date Witnesses
15 Apr 2021 Helen Stephenson CBE · The Charity Commission for England and Wales, John Rose · The National Lottery Community Fund, Sarah Healey · Department for Digital, Culture, Media and Sport View ↗

Who gave evidence

3 witnesses
WitnessOrganisationSessions
Helen Stephenson CBE · Chief Executive Officer The Charity Commission for England and Wales 1
John Rose · Interim Chief Executive The National Lottery Community Fund 1
Sarah Healey · Permanent Secretary Department for Digital, Culture, Media and Sport 1

Correspondence

4 letters
DateDirectionTitle
21 Oct 2021 Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, …
25 May 2021 Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, …
16 Apr 2021 Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, …
15 Apr 2021 Correspondence from Public Accounts Committee Chair Meg Hillier, re Government …