The government has promised a “fundamental review of how it makes grants” to charities, and has said it will create a central register of all charitable grants, following the collapse of Kids Company.
A Treasury response to the Public Accounts Committee also promises that charities must have “robust and transparent mechanisms in place for measuring their own performance” before they can receive public money. And it promises to report transparently on all grant-giving.
The promises were made in a Treasury response to a Public Accounts Committee report into the collapse of Kids Company.
Kids Company collapsed last year after receiving more than £40m of government money, and a Public Accounts Committee report made several recommendations to improve government policy as a result, all of which have been accepted.
“In the light of the events surrounding Kids Company the Cabinet Office has launched a detailed review of how it makes grants under section 70 of the Charities Act and will incorporate the Committees recommendations,” the Treasury response said. “The review is considering the criteria used to assess risk and is developing a proposal for a new, more rigorous and probing approval process.”
The report says work on a new register of government grants is already under way.
“The Grants Efficiency Programme (GEP) is developing the Government Grants Information System (GGIS), which will help departments make more informed decisions in relation to their grant funding by providing them with more comprehensive information,” the report said.
“The GGIS will enable the recording and reporting of grant information across government in a simple, standardised and scalable way. It will improve transparency and provide insight into government spend. It will enable departments to manage grants efficiently and effectively while providing data to help to reduce the risk of fraud by opening up Government’s ability to see whole picture, and ensure we only pay once for each outcome.”
It said that the first upload to the system took place in November and that it hopes the system will be operational in a year to 18 months.
A response from Nick Davies, public services manager at NCVO, backed the government’s plans for the grants register.
“We wholeheartedly endorse this plan which addresses a long-standing government failure,” he said. “It shouldn’t have taken a grant-giving fiasco on the scale of Kids Company to convince the Cabinet Office or the Treasury of the value of being able to know who the government grant funds and how much they get.”
However he said any register should also include grants going to the private sector, and that the register should be made fully public.
