Millions spent on consultants for Covid scheme ‘not justified’, MPs say

Ministers could not justify spending millions of pounds of taxpayers’ money hiring consultants to assess applicants for its £500m Covid emergency support package for charities, despite clear bid processes already existing, according to cross-party MPs.

Ministers were also unable to explain why a team of political special advisers was given an unusually central role in deciding which charities would receive funding, or why some charities received cash even though their bids initially received low scores.

The public accounts committee (PAC) said there was a “notable opaqueness” surrounding decisions on how funds were distributed to charities, with little clarity about how the cash was shared regionally, or what impact it had.

MPs were examining the £513m allocated to the Department for Digital, Culture, Media and Sport (DCMS) last year to provide financial support for charities to help them meet increased demand during the pandemic. An additional £200m went to hospice charities via the Department of Health and Social Care.

The PAC chair, Meg Hillier, said that it was not the first time during the pandemic “worrying smoke” had been thrown up by ministers around Covid support funding decisions, with “growing instances of the official processes overridden without adequate explanations”.

“Exorbitant funds” having been spent by consultants without the impact being measured was a recurring pandemic theme, she added. “I fear one clear impact is the steady erosion of taxpayers’ trust that their money is being well spent in this national emergency.”

The committee highlighted £2m paid to consultants PricewaterhouseCoopers to double-check £200m in awards to charities made by the national lottery community fund. There was “no clear rationale” behind using the consultants, MPs said.

The DCMS said the support from PwC was needed “due to the fast-paced and pressured environment it was operating in” but could not say if the extra checks had added value. The process “had not been set up in the best possible way to start with,” it admitted.

MPs said five unnamed special advisers were present at the meeting to discuss funding bids. “We remarked that the level of influence exerted by special advisers and their involvement at the point of decision-making appeared to go beyond anything we had previously witnessed as members of this committee.”

It said officials had ranked 53 funding bids put forward by government departments to support charities in their sector on the basis of “additional urgent need” due to Covid. However, at the meeting, nine of the 13 bids which scored lowest were among the 42 eventually chosen.

Similarly, of 35 bids for the DCMS match-funding scheme, all four of the lowest-ranked bids made it into the final list of 20 organisations after discussions with ministers about “their views and preferences,” including three bids “where officials were unsure if they [the bids] were eligible”.

The DCMS insisted that the processes followed were “appropriate” as new information became available. However, the PAC said the department was “unable to elaborate further on what new information came to light that led to the lowest-scoring applications receiving funding”.

Poor data meant it was not yet clear how different regions of the UK had benefited from the charity support fund, the PAC said. “To the extent that information is available, analysis showed that London had received the most funding (£47m) and the north-east the least (£14m).”

The PAC said it was concerned frontline charities supporting vulnerable individuals received less Covid financial support than other sectors. “While we recognised that government 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.”

Tom Collinge, policy manager at charity analysts NPC, said the government had misunderstood that frontline charities could not furlough staff who were out tackling the crisis. “So while charities were reporting incomes dropping, demand was rising and government support was less than for other sectors.”

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