Announcement Of Committee Inquiry: Funding Of Voluntary Sector Organisations

Evidence submitted from: Gwent Association of Voluntary Organisations
Author: Simon James, Assistant Director, Monmouthshire
Main Contact: Jenny Render, Director jenny.render@gavoales.org.uk
01291 672352

Points:

1. Local Compacts - there seems to be a position within each local authority areas for agreeing local Compact arrangements, where agreements are laid for the relationships between statutory and voluntary sectors including local authorities and local health boards.  These seem to be on the whole ineffective in providing minimum standards in terms of supporting the financial sustainability of voluntary organisations, and therefore, continuity of care for the most vulnerable people in society who benefit from these services. There are some good practice examples, but these are in the minority.

2. Welsh Assembly Government Grants - the grants currently being managed mainly by local authorities on behalf of the Assembly are a significant barrier to a thriving voluntary sector in Wales.  The Assembly generally gives year on year grant funding to bodies such as Community Safety Partnerships, often the amounts are not known until well into the financial year.  Many voluntary organisations therefore receiving these grants and employing staff, have no security of tenure, and are often put in the position of running services and employing staff without knowing whether they will be paid for them. When there settlements below inflation, it is often a reduction in services being provided by the voluntary sector that results.  I believe that there is a lack of awareness that lack of robust financial planning at a national level, the voluntary sector is unable to provide the type of planned and well developed services that will meet the needs of vulnerable people and communities in Wales.  While some of these partnerships provide a transparent process, others have no process of voluntary sector engagement.  There is no consistency.

3. Local authority procurement (grants, service level agreements) - this mainly relates to the above issue, as local authorities and local health boards often have limited information in terms of medium term financial planning.  Therefore, services again are constantly at risk, losing staff due to the lack of employment security, cannot plan ahead or work to improve service delivery as they are unable to make any long-term commitments or investments.  We have direct evidence and examples of receiving late notification for projects we run ourselves, and we have direct access to partnerships and agencies.  This is even more difficult for those organisations to complain if their income is solely on project delivery.

4. Social enterprise and sustainability - local authorities are often careful in supporting voluntary sector organisation to obtain capital in the way of premises.  Community based social enterprises will generally struggle to make an impact unless they have the infrastructure and capacity to grow.  In many cases, handing over premises to community enterprises saves local authorities significant sums of money in terms of maintenance and running costs, without taking into account the longer-term economic benefits that will arise from the development of new community based services and activities.  The thinking is very short term.  In areas where property values are high, there are few opportunities to support this provision.

In addition, many social enterprises have developed effective services to meet the needs of communities but are then lost due to the competitive tender process which are geared toward larger organisations - that is they have the personnel, experience and resources to win tenders.  Voluntary sector organisations are more likely to challenge assumptions and pose difficult questions as a result with their close links to communities.  Where local authority culture does not allow for challenge, voluntary organisations can experience significant barriers as local authorities look to the easier option by working with the private sector. This results in the loss of local services that are geared toward meeting the needs of local people.

5. Small Grants - there are often a range of small grants that are so small as to have more of an impact in terms of administration than supporting community groups.  Current examples are the Grass Roots, Russell Commission and Millennium Volunteers grants.  These could all be administered under the same grant by CVC’s, as long as they were more flexible.  For example the Grass Roots fund looks at supporting vulnerable groups, but only those groups with a turnover of less than £5,000 can apply.  We have the projects that will benefit the target group but might not be able to find a group with such a low turnover.  The total grant from Grass Roots available in Monmouthshire is less than £4,000. The total grant available in Monmouthshire for Russell Commission Youth grants is £5,000.  Yet we have different application forms, processes and grant panels. This is a waste of time and resources.

6. National Umbrella Bodies - there seems to be a growing willingness to grow the infrastructure of the voluntary sector in terms of national umbrella bodies that specialise in specific areas such as social enterprise.  National or regional bodies increasingly absorb extra funding that could be used for grass roots organisations.  These groups usually have a very limited membership and little or no engagement at a local level and concentrate in a narrow geographical area, usually near to their base of operations.  Often local groups are unaware of their existence. This process is restricting the amount of money going directly to grass roots community organisations.

Recommendations

1. There is a National Compact between the Welsh Assembly Government and local statutory sector partners such as local government, local health boards and the police in order to improve medium term financial planning.  This is critical to support an effective voluntary sector and support longer grants, agreements and contracts and to have an effective local compact.

2. A more effective national framework will support a stronger and more consistent Local Compact between local statutory sector partners and the local voluntary sector.  Medium term financial planning will enable long term service planning, development and improvement.

3. Social Enterprises - each local authority needs to ensure community strategies include a section on the development and procurement of social enterprises.

4. Small grants - CVC’s should be allowed to have flexibility and discretion around such small grant pots by incorporating them into existing funding streams but directed toward the target group.

5. National Umbrella Organisations - WAG should ensure there is no duplication of effort. National umbrella groups should clearly demonstrate how they are adding value to any funding they receive and they have a broad based membership.  As a minimum, they should be able to clearly demonstrate how the sector is growing and has access to more resources as a direct result of their activities.   WAG should practice caution when deciding to continue to support organisations operating nationally without effective grass roots support and evidence of need.  There is already a well established CVC network that has excellent links with all communities within Wales and this network should be better used in terms of consultation on strategic funding decisions.  In our experience, national and regional bodies without a local infrastructure are relatively ineffective in meeting local need. Those that are, are very specific about what service they are providing and to whom.  They clearly add value to local work and work in partnership. They tend to build on existing infrastructure not duplicate it.