The government showed a “notable opaqueness” in some decision-making over the allocation of emergency funding to charities and spent £2m on consultants, parliament's Public Accounts Committee (PAC) has said.
MPs further criticised the Department for Digital Media and Sport (DCMS) for not having a clear idea about how to measure the impact of funding to support charities during the pandemic, in a report, Covid-19: Government Support for Charities.
The committee had set up an inquiry to look at how DCMS had spent the £513m it was allocated from the £750m package of support for charities. PAC has now made five recommendations for the government.
PAC held one virtual evidence session with representatives from DCMS, the National Lottery Community Fund and the Charity Commission. It also received dozens of written submissions from charities about their experiences and the pressures the sector is facing.
Its inquiry followed on from a National Audit Office report which highlighted that some money had been awarded to organisations where officials had initially been unsure that the applicant was eligible.
PAC said that the lack of transparency about decision-making, deviation from formal processes and inadequate attention paid to impact was part of a worrying trend across government.
Accountancy firm PwC was paid £2m by DCMS to perform due diligence on applications to the NLCF. PAC highlights that NLCF is an experienced grantmaker. “But the department paid PwC £2m for specialist support on data collection, analytical support, and due diligence,” the report says.
The PAC report draws a number of comparisons with funding targeted at cultural organisations and the charity sector, with the former receiving “nearly three times more funding” than the latter.
MPs say they are not satisfied with some of DCMS’s explanations and have asked the department to respond on a number of specific points. Within three months PAC wants DCMS to “set out the specific actions it is taking to monitor and understand the financial health and resilience of the charity sector”. DCMS has insisted that it followed the rules and that decisions were made properly.
