National Audit Office report on Investigation into government funding to charities during the COVID-19 pandemic

In April 2020, the government announced a financial support package for charities to relieve pressure on public services and help charities meet increased demand during the COVID-19 pandemic. The Department is responsible for distributing £513 million, which after deducting expected administration and evaluation costs, leaves at least £494 million available to charities.²

Since April 2020, the Department has announced seven funding schemes through which charities could access funding, with the most recent scheme being announced in December 2020.³ Charities could access funding through a network of 198 partners including at least nine government departments; three public organisations; and 186 other partners.

The largest single scheme from which charities could compete to access funds was the Coronavirus Community Support Fund (CCSF), managed by The National Lottery Community Fund (TNLCF).⁴ The Department initially allocated £310 million to CCSF but later changed this to £199 million.⁵ It decided TNLCF was the only organisation capable of distributing the funding available in the timeframe the Department wanted. After deducting administration and evaluation costs of £11 million, £188 million was available to charities. This scheme received over 13,800 applications worth nearly £342 million. By the end of October, TNCLF had disbursed more than 95% of the £188 million it had available.

The Department initially ringfenced £160 million for government departments to distribute to charities providing key services or supporting vulnerable people within their sectors. It received 53 applications for this scheme worth £277 million. Following assessment by the Department, £164 million was allocated to support 21 projects across nine government departments.

Government stressed the need to distribute its charity funding at pace. By the end of July 2020, more than three months after the funding was announced, charities had received £103 million, 21% of the £494 million available across all schemes. This rose to £359 million (73%) by the end of October 2020 and by 19 February 2021, charities had received £454 million (92%) of available funds. As at 19 February, the Department had awarded £18 million to charities that had not yet been disbursed. The remaining £23 million had not yet been awarded or disbursed to charities, which the Department intends to do up to 31 March 2021.

Any funds remaining undistributed or unspent by government departments, other partners or charities after 31 March 2021 are expected to be returned to HM Treasury.

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Notes for Editors

1. 1. Support was targeted at those organisations in the voluntary, community and social enterprise sector providing vital services to the vulnerable.The report refers to organisations in this sector as charities.
2. 2. The total government support package to the sector includes £200 million allocated to the Department of Health & Social Care to purchase bed capacity in charitable hospices and £60 million for the devolved governments of Scotland, Wales and Northern Ireland.These allocations are out of scope of this investigation.
3. 3. The £513 million was allocated across seven schemes: £199 million to the Coronavirus Community Support Fund (CCSF) delivered by the National Lottery Community Fund (TNLCF); £164 million to sector-specific projects across nine government departments; £85 million to the Community Match Challenge; £37 million to the Big Night In; £17 million to the Youth COVID-19 Support Fund; £8 million to the Loneliness Fund; and £5 million to the Voluntary and Community Sector Emergencies Partnership (VCSEP). Figures do not sum due to rounding.
4. 4. The National Lottery Community Fund is one of the Department’s non-departmental public bodies.
5. 5. Prior to the scheme being launched the Department reduced the allocation from £310 million to £200 million and later this reduced to £199 million because the Department funded some evaluation costs itself and there was an underspend on the scheme. The Department used funding not distributed through the CCSF to set up four of the seven schemes: The Community Match Challenge, support to VCSEP, the Youth COVID-19 Support Fund and the Loneliness Fund.