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A mixed PACkage: the government’s response to the Public Accounts Committee

By Becca Bunce and Zara Todd, interim co-heads of influencing at ACEVO.

In April, the Public Accounts Committee reviewed the government’s support for charities during the pandemic. Below is a quick refresher on the evidence that ACEVO submitted, the PAC report and the UK government’s response.

A refresher: ACEVO’s evidence

ACEVO’s written evidence to the committee highlighted the vital role the social sector played in supporting communities to deal with the impact of the pandemic. From the outset of Covid-19 we have seen civil society organisations often pick up the work for the public and private sectors to ensure that our communities and society can thrive. Whilst we welcomed the funding made available to some organisations, we also acknowledged that it wasn’t enough to cover the increased demand for services and the deficit in revenue caused by the pandemic. We also noted there were some lags in funding being received, which put an additional strain on charities’ finances.

A refresher: The PAC recommendations

As a result of the evidence the Public Accounts Committee received from across the sector, the committee came to five conclusions and made five corresponding recommendations to the Department for Digital, Culture, Media and Sport in its report:

1. Conclusion: The Department has paid out over 90% of the funding it has available for charities but could not adequately explain how it had determined the total value of the package that was needed.

Recommendation: The Department should, within three months, set out the specific actions it is taking to monitor and understand the financial health and resilience of the charity sector, including how charities are making use of all applicable government pandemic support schemes.

2. Conclusion: [The Committee is] not convinced that the Department’s decisions about how to allocate funds were sufficiently transparent.

Recommendation: When applying new or innovative processes in unusual circumstances such as those experienced during the pandemic, the Department should ensure that it keeps appropriate records of decisions, including when this incorporates advice from special advisers. The Department, as part of learning lessons for the future, should examine how the steps it took to ensure there was a clear distinction between impartial advice from civil servants and the political advice offered by special advisers. It should then write to us setting out the steps it took and the lessons it has learnt for future.

3. Conclusion: The Department cannot explain the additional benefit is has received from its contract with a professional services firm to perform due diligence on charity applications to The National Lottery Challenge Fund (TNLCF).

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.

4. Conclusion: The Department cannot demonstrate how its funding decisions have benefited charities and will not be able to do so until it completes its evaluation of the funding at the end of 2021.

Recommendation: The Department should, within three months, write to us to explain the criteria it will use to assess the impact of the funding. It should, by the end of December 2021, write to us with the outcome of the evaluation, ensuring this exercise represents charities that did not receive funding as well as those that did.

5. Conclusion: 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.

Recommendation: The Department should, within three months, set out the triggers that would prompt it to consider further government financial support to the charity sector.

ACEVO supports these recommendations as they encourage greater transparency and reflection, offering the government a way to learn from the challenges faced in supporting civil society organisations during Covid 19 in order to improve decision-making in the future.

The UK government response

Last week in a broader response compiled by the Treasury, the Department for Digital, Culture, Media and Sport (DCMS) responded accepting the first four of the PAC’s recommendations

At ACEVO we were disappointed to see that the fifth recommendation by the committee was declined with the response that:

There is no single data source that can provide a definitive trigger for taking a decision on further financial support. The circumstances under which further support would be assessed must be based on a range of quantitative and qualitative sources, including intelligence on challenges facing critical sub-sectors.

You can see more analysis by ACEVO on the response to the fifth recommendation in this blog.

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