MPs raise fraud and consultancy fee concerns around Covid funding for charities

MPs have questioned the government’s handing of millions of pounds to consultants to review applications from charities for emergency funding during the Covid-19 pandemic.

A report published this week by MPs also raises concerns that more than £600,000 of the emergency funding has been identified as fraud.

In handing out the £500m Coronavirus Community Support Fund to charities, the Department for Digital, Culture, Media & Sport (DDCMS) hired consultants Price Waterhouse Coopers (PwC) £2m for specialist support to carry out due diligence on award decisions.

The money for PwC also covered support on data collection and “analytical support”.

But members of the Public Account Committee, probing the handling of the funding, found that while the DDCMS “asserts that the support from PwC was necessary due to the fast paced and pressured environment it was operating in” there is “no evidence of the added value it received from these additional checks”.

They add that the DDCMS has “failed to provide a clear rationale for spending up to £2m of taxpayers’ money on consultants to assist with the assessment of bids, when established processes were already in place to do this”.

Committee members also note that the DDCMS revised arrangements “after a short amount of time” as reviewing awards under £10,000 was overly onerous”.

The committee adds that there has been a “notable opaqueness over some aspects” of DDCMS decision making.

MPs add that 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.”

Fraud concerns

They also found that to date the DCCMS has identified fraud valued at £624,000 in the funding and is committed to reclaiming this money.

MPs said that the DDCMS “accepted that its decision to prioritise getting money to charities quickly to meet the extra demand cause by the pandemic increased the potential for fraudulent claims”.

“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,” said MPs.

Another concern raised by MPs is a lack of “information on where in the country 18% of the funds awarded are actually being used, equivalent to £101m of taxpayer’s money and 2,882 funding awards”.

PAC chair Meg Hillier said: “The PAC has seen these twin themes recur throughout the policy response to Covid, especially when it comes to disbursing funds. One is a worrying smoke thrown up around award decisions, with growing instances of the official processes overridden without adequate explanation.

“The other is the focus on inputs not outcomes, on getting money spent – including exorbitant amounts on consultants - without factoring or measuring the impact. I fear one clear impact is the steady erosion of taxpayers’ trust that their money is being well spent in this national emergency."

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