Recommendation 3

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 Department in selecting them as a partner. But the Department paid PwC £2 million for specialist support on data collection, analytical support and due diligence, including checks on all award decisions by TNLCF for the CCSF. TNLCF, however, was confident in the processes it already had in place to conduct these checks and award funding. The Department revised the arrangements after a short amount of time because reviewing awards under £10,000 was overly onerous. The Department asserts that the support from PwC was necessary due to the fast paced and pressured environment it was operating in but has no evidence of the added value it received from these additional checks. While the Department has been focussed on distributing money as quickly as possible, its objective has also been to distribute it in the right way and prevent fraud. The Department has to date identified fraud valued at £624,000 in the CCSF and has committed to reclaiming this money. Whilst we welcome this commitment, we know from our other reports on COVID responses such as procuring Personal Protective Equipment and administering bounce back loans that the need to act at speed can reduce transparency and increase the risk of fraud and error. Recommendation: The Department should write to us within three months, setting out: how it judges the value for money of this contract and any lessons learned as to how and when it would apply a similar approach in future; and the fraud position across the package including how much money it has recovered.