Local Grants Forum say new data reveals damaging decline in grant funding

05/03/2012

The Local Grants Forum says that the 2012 NCVO Civil Society Almanac, published today, provides conclusive proof that a major shift from grant funding to contracting by local public bodies is taking place. Based on figures up to 2010, the Almanac shows public sector grant funding has fallen dramatically since 2005 - and fell by £500 million between 2007/08 and 2009/10. These figures reflect the position prior to the recent big reductions in public spending, which have resulted in much publicised further cuts to grant funding during 2010/11 and 2011/12.

The Local Grants Forum was founded in 2007 in response to this threat to local grant funding. The 17 national charities who comprise the membership of the LGF believe grant aid is an essential part of the local funding mix for voluntary and community organisations and vital for sustaining thriving local communities. This belief is supported by the National Audit Office’s Successful Commissioning Guide. It advises commissioners to consider carefully in each individual case whether grants or contracts will deliver better outcomes and value for money. The LGF fears that the decline in grants is indicative of an unthinking shift towards contracts, which damages the local voluntary sector and the people and communities they serve.

While LGF members acknowledge the fact that some larger charities are being given the opportunity to deliver public services, evidence shows that smaller local charities, including many BME community groups, are struggling to access this funding. Falling grant support means that society is the poorer, as we lose the creativity and energy that comes from grant funding the development of innovative solutions by local communities.

Data from NCVO’s latest Almanac, which offers an annual analysis of a range of indicators about the voluntary sector, including where organisations get their funding, showed a rapid decline in grants from £4.5 billion in 2005 to £3 billion in 2010.

Speaking on behalf of the forum, Joe Irvin of NAVCA said, "Unfortunately this data confirms what members of the LGF have warned for some time – that grants from local public bodies to support work in the community are dwindling, with more local charities being forced to compete for funding on a contract basis or have no support at all.  This trend is not in the best interests of local charities, the communities they serve nor ultimately public sector funders."

Joe went on to add, "Small local charities should not be viewed as just another type of contractor, expected to compete with big private firms.  It’s vital that national and local government understand that grants, rather than contracts, are often a better way to get the kind of civic engagement it wants."

• The following members of the Local Grants Forum have signed up to this statement: NAVCA, AdviceUK, Children England, Citizens Advice, Community Foundation Network, Community Matters, Clinks, Directory of Social Change, Home-Start UK, Housing Justice, NCVYS, People Can, Urban Forum, Women's Resource Centre, Voice4Change England.
• For more information about the work of the Local Grants Forum, contact Katy Wing at katy.wing@navca.org.uk or go to their web page.