Covid-19: Government support for charities
Closed
What the inquiry looked at
“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 and social enterprise organisations supporting government’s coronavirus response through activities delivering charitable purposes. DCMS stressed the urgency to distribute funds quickly and prioritise those charities most in need. The Committee will question senior officials at DCMS and the Charity Commission on how well the funding has been distributed and whether it is achieving its objectives. If you have evidence on these questions please submit it here by 6:00 pm on Thursday 08 April 2021.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
The Department for Digital, Culture, Media & Sport (the Department) has acted quickly to pay out the overwhelming majority of its £513 million funding package to provide financial support for frontline charities, voluntary groups and social enterprises in response to the COVID-19 pandemic. In doing so, it has allowed many to continue to provide vital services to some of the most vulnerable in society and reduce pressure on services elsewhere. While the Department should be commended for paying out over 90% of its available funding by the end of 2020–21, there has been a notable opaqueness over some aspects of its decision making. For example, it is unclear what influence special advisers had over some funding decisions, with some charities awarded government funding despite the Department’s officials initially scoring their bids in the lowest scoring category, including four out of the five lowest scoring applications. It is also unclear why some charitable organisations succeeded in securing funding despite three instances where officials were unsure if organisations were even eligible for government funding in the first place. In addition, the Department has failed to provide a clear rationale for spending up to £2 million of taxpayers’ money on consultants to assist with the assessment of bids, when established processes were already in place to do this and 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.
By primarily focussing on distributing funding in a timely manner, the Department hasn’t developed a way to measure the impact funding has had across the country or what the aftermath of the pandemic will mean for the long-term financial health and resilience of the sector. As part of its evaluation due at the end of 2021, it will be essential that the Department fully understands the benefits that have been delivered as a result of taxpayers’ investment. Whilst we recognise that government’s funding was not intended to support or save every charity, we remain concerned about the long-term financial health and resilience of the sector as the pandemic continues. We urge the Department to continue to monitor the situation and update us on what further action it intends to take.
What the government said
The government responded on 2 September 2021. The deadline was 9 August 2021.
The government agrees with four of the Committee's recommendations on the charity support package, setting target dates of September and December 2021, and disagrees with the recommendation to set out triggers for further financial support.
- On monitoring the sector's financial health, the government agrees (target date September 2021). It says there remain "limitations and gaps in the evidence and data", and that "plans for implementing change may not have been finalised" at the three-month deadline.
- On records of decisions and the role of special advisers, the government agrees and reports the recommendation as "implemented". It says DCMS is "confident that proper processes and procedures were followed in this case".
- On the evaluation, the government agrees (target date December 2021), with impact and process strands. It says it "will not necessarily be possible to isolate or attribute all impacts specifically to the £750 million".
- The government disagrees that triggers should be set out, saying "There is no single data source that can provide a definitive trigger". It says the department "will set out for the Committee the range of evidence, data and intelligence" used to assess support.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 1 February 2021 to 21 October 2021. The dashed mark is the deadline Parliament records for the government's response.
- Oral evidence 15 Apr 2021
- Report 9 Jun 2021
- Government response 2 Sep 2021
- Correspondence 4 letters
What it recommended 7 recommendations · 12 conclusions
2We are not convinced that the Department’s decisions about how to allocate funds were sufficiently...
3The Department cannot explain the additional benefit it has received from its contract with a...
4The Department cannot demonstrate how its funding decisions have benefited charities and will not be...
5The Department cannot yet demonstrate that it fully understands the financial health and resilience of...
1On the basis of a Report by the Comptroller and Auditor General, we took evidence...
6We questioned the Department about how it decided which bids from other government departments it...
7Given our concerns that this was an unusual process, the Department contended that it was...
8The Department provided £30 million of funding to the Department for Environment, Food and Rural...
9We also asked about the decision-making process around awards for the Community Match Challenge scheme,...
10The Department reduced the funding allocation to TNLCF from £310 million to £200 million around...
11The Department paid £2 million in 2020–21 to a professional services firm, PwC, to provide...
12We have found in our reports on the government’s response to the COVID-19 pandemic, that...
13By February 2021, the Department had identified 76 fraudulent applications, 70 of which had resulted...
14The Department has not yet evaluated whether the funding package has met its objectives of...
15The National Lottery Community Fund (TNLCF) told us that it undertook regular surveys of customers...
16The National Audit Office found that the information available on the geographical distribution of funding...
17The Department told us that its intention was that the overall funding provided would be...
18The Department recognised that charities had lost traditional sources of income during the pandemic, such...
19We asked about the impact of the pandemic on the financial health of the sector...
Evidence
Oral evidence sessions 1
- 15 Apr 2021COVID-19: Government support for charities3 witnesses, listed belowparliament.uk ↗
Who gave evidence 3 witnesses
- Helen Stephenson CBEChief Executive Officer, The Charity Commission for England and Wales
- John RoseInterim Chief Executive, The National Lottery Community Fund
- Sarah HealeyPermanent Secretary, Department for Digital, Culture, Media and Sport
Correspondence 4 letters
- 21 Oct 2021Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, Culture, Media and Sport, re Update on Recommendation 1, 3, 4 and 5 from the Committee’s report on COVID-19: Government Support for Charities (Fifth Report of Session 2021-22), dated 30 September 2021
- 25 May 2021Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, Culture, Media and Sport, re Evidence session on Covid-19 Charities Funding, dated 14 May 2021
- 16 Apr 2021Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, Culture, Media and Sport, re Government support for charities during the Covid-19 pandemic, dated 12 April 2021
- 15 Apr 2021Correspondence from Public Accounts Committee Chair Meg Hillier, re Government support for charities during the Covid-19 pandemic, dated 26 March 2021