Citizenship scheme costs taxpayers millions

Written By: David Hencke
Published: March 22, 2017 Last modified: March 25, 2017

Taxpayers have paid out millions of pounds up front to organisations for “ghost places” on  David Cameron’s flagship  National Citizen Service  programme  which were never filled, a report by the Commons Public Accounts Committee  reveals.

At least £10m was paid up front last year and a further £6.6m in 2015 for unfilled places on the national scheme aimed to provide community experiences for  teenagers from the age of 16 to 17. The figures are certain to be an underestimate since in 2012 when the scheme was set up there were 7000 unfilled places.

The MPs said: “The Trust pays providers 50% of the contracts costs, based on the contracted number of places and contracted unit cost, up-front.  In 2016, as providers only filled 87% of these contracted places, the Trust overpaid an estimated £10 million for places not filled.

“In late 2016, the Trust began an audit to better understand its providers’ costs and potentially recover the 2016 overpayments. The audit did not explicitly cover overpayments before 2016, although the Trust estimates these were around £6.6 million for 2015 alone.”

MPs are unhappy that the trust running the scheme has made little attempt to recover the money and are demanding progress reports later in the year.

They warned:“This is taxpayers’ money and we were disappointed at the Trust’s relaxed attitude about the non-recovery of these funds.”

The report which questions whether the programme which has cost taxpayers £475m already is value for money – even if it is popular with teenagers who have had placements.

They are also very unhappy about the lack of transparency over director’s pay and corporate governance.

“The NCS Trust has not met the standards of transparency to be expected from organisations funded almost entirely by the taxpayer. There were salary increases and other figures in the Trust’s annual report that the Chief Executive of the Trust could not explain.”

”The Trust cannot be properly held to account without adequate information in the public domain. The National Citizen Service Bill and Royal Charter, currently being considered by Parliament, will make the Trust a public body so it will be formally obliged to comply with stricter public sector transparency requirements and standards.

“But there is no reason why it cannot, in the spirit of openness and transparency publish additional disclosures in the meantime, and we were concerned by the Trust’s apparent reluctance to do so.”

An examination of the latest accounts for 2015 filed at Companies House shows £534,000 has been spent on director’s salaries and over £3.2 m on 50 staff salaries and pension costs. The highest paid director receives a £143,500 package –including a salary of over £137,000 a year. There are four executive directors and eight non executives.

The trust was asked to disclose how much money they had recovered and to reveal directors’ salaries but had not replied at the time of going to press.

About David Hencke

David Hencke is Tribune's Westminster Correspondent