Different needs: A project to refurbish a war memorial would need less long-term funding than a biofuels initiative, says Wittenberg
Three-year grant funding is still not the norm for the sector - but does it have to be? Ben Cook reports.
Three-year grant funding for the third sector is not yet standard practice, according to a new survey, despite a pledge from Gordon Brown in 2006 that it would become the norm. A survey of government grant programmes carried out by the Directory of Social Change has shown that, of 22 grant programmes listed on www.governmentfunding.org.uk, the average maximum length of grant awarded by government departments is 2.8 years (30 July, page 1).
The DSC figures shows that the maximum grant length varies considerably between different funding streams. For example, the maximum grant award given by the Department for Culture, Media and Sport under the Youth Heritage scheme is five years, but the maximum award under the Cabinet Office's Adventure Capital Fund Business Development Grants scheme is only one year.
The Office of the Third Sector said last week that the Government's commitment to making three-year funding programmes the norm related to the spending round that began on 1 April this year. "It won't be reflected by existing programmes," said a spokesman for the OTS. "Government departments will report their progress to the third sector minister in the autumn, and his findings will be published as part of the Compact review later this year."
However, Ben Wittenberg, director of policy and research at the Directory of Social Change, says he has doubts about whether three-year funding should be the norm.
"It's a simplistic approach," he says. "Blanket three-year funding is not the answer. The majority of departments structure the process around sensible timeframes."
Although it would make sense to have a five-year funding programme for, say, a bio-fuels project, he says, a project to renovate a war memorial would be unlikely to need multi-year funding. "There should be inconsistency," he says.
Wittenberg also warns that handing out three-year grant funding at every opportunity could deprive third sector organisations of much-needed shorter-term funding. "If everyone gets three years, other organisations are not getting any," he says. Some organisations might be able to survive for one year without grant funding, he says, but would probably go to the wall if they had to wait three years for an injection of government cash. "It's harder to bridge a funding gap for three years," he says.
Wittenberg believes the ideal situation would be to review the funding needs of projects every year on a rolling basis, regardless of the length of grants. He says the OTS needs to ask government departments for more evidence of exactly what projects they are funding in order to understand what influences their funding decisions.
"There is a gap in information," he says. "What is really happening? What helps departments make decisions? Is it that three-year funding equals good?"
Richard Corden, chief executive of the Commission for the Compact, says long-term funding for third sector organisations has a number of benefits. "The Government gets better value for money and the third sector is more stable," he says.
But he agrees that three-year funding is not always appropriate: "With a large number of grants and funding schemes, a three, five or 10-year programme is the best solution. In some circumstances, however, a one-year programme is right."
Corden says it is unscientific to add up the maximum length of grant awarded by different departments in order to produce an average. "Three years is the norm," he says. "Any departure has to be explained and justified. In some cases it will be justified, and in some cases it won't be."
Peter Kyle, deputy chief executive of Acevo, says that an average of 2.8 years represents a huge improvement for the Government. "It shows progress," he says. "The average is a hell of a lot better than it was. But there is more to do. Government finances work on a three-year cycle, so there is no reason why this can't be passed down to third sector organisations."
Kyle says part of the difficulty is that councils are free to allocate funding as they see fit, regardless of government directives. "There is a lot of historical practice in the way local authorities spend money," he says. "A lot of local authority spending is autonomous. The Government can't tell local authorities which organisations to give more money to."
Kyle adds that, with funding streams set years in advance, change will take time. "We need to keep the pressure up, demonstrate the benefits of three-year funding and feed this into government - and keep building momentum."
