When David Cameron first set out his vision of the big society in 2009, few would have guessed it would lead to two embarrassing National Audit Office inquiries into the funding with public money of a charity with the purpose of promoting it.
The charity, the Society Network Foundation, was set up in 2011 to take ownership of the Big Society Network, a company established shortly before the 2010 election. The BSN's first chief executive, Paul Twivy, a former advertising man with a track record in charities, pledged it would be "an independently funded and run voice of the citizen, enabler of the citizen and partner to government".
But four years later, both the charity and the company, dogged by criticism over their receipt and management of more than £3m of public funds, had collapsed, delivering another blow to the big society as a political idea.
So what went wrong? The BSN, at first chaired by Lord Wei, later Cameron's big society adviser, was initially funded by donations from private individuals, including Martyn Rose, a businessman and Conservative Party donor who took over as chair soon after the election. Its first projects were Your Local Budget, funded by an £80,000 grant from the innovation body Nesta - then a non-departmental public body, now a charity - and Your Square Mile, set up to increase community involvement.
Nesta also gave it another grant of £400,000, £150,000 of which was for core running costs and the rest for Nexters, a digital network for social ventures, Spring, a giving research scheme, and It's Our Community, a project to explore innovation in community ownership. All three are now defunct.
One of the conditions of the Nesta grant was that the BSN registered as a charity, which is why in April 2011 the Society Network Foundation was registered with the Charity Commission and took control of the BSN. By now, Twivy had been replaced as chief executive by Steve Moore, whose career spans media, policy and events. He had organised its launch at London's Oxo Tower.
Moore says he had attended a meeting at Number 10 in July 2010 with Wei, Rose and Steve Hilton, Cameron's first director of strategy and initiator of the big society idea. Twivy described his plan for Your Square Mile to become the world's largest mutual and bring communities together, but Moore says Hilton disliked the idea. Shortly afterwards Twivy left the BSN to set up a company called Your Square Mile Ltd, which is still operating.
The Big Lottery Fund had agreed to give a grant of £830,000 to the BSN for Your Square Mile using its solicited bids procedure, in which the grant-maker asks organisations to apply for funds. When the BLF gave the money to the BSN in February 2011, it immediately passed it on to YSML. This was to become an issue later on.
Moore says that when he took over the BSN in December 2010, he worked to get the various projects off the ground and secure additional funding. In February 2011, the BSN began conversations with PTA UK, the charity that supports parent-teacher associations, and Community Inspired, a company that worked with PTA UK and produced its magazine. This appears to be when things began to unravel.
Paul Kent, a founder of Community Inspired, says he began speaking to the BSN about his Adoptaschool project, which would encourage businesses to become partners with local schools and help their PTAs. He says the BSN also began talking about a similar idea, called On the School Run; he was concerned this was similar to Adoptaschool.
In March 2011, Kent wrote an email to the BSN seeking reassurance that On the School Run would not undermine the work of PTAs and Community Inspired's services. Moore says he then invited Kent and PTA UK to the Big Society Awards at 10 Downing Street in May 2011, at which Kent and David Butler, chief executive of PTA UK, met Cameron and discussed Adoptaschool.
A pivotal moment in the saga came in January 2012, when Butler of PTA UK was invited to another meeting at Downing Street attended by, among others, Shaun Bailey, at the time an adviser to the Prime Minister, Almudena Lara, deputy director of the social action team in the Office for Civil Society, and Moore.
Kent, who was not at the meeting, says that one of the items on the agenda was a bid that the Society Network Foundation was due to make to the Cabinet Office's Social Action Fund for a children's fitness project called Get In.
He says he was told after the meeting by someone who was present that funding for the Get In project through the £20m Social Action Fund was a near-certainty. "The people at the meeting were told this was a done deal," he says.
A spokesman for PTA UK confirms that one item on the meeting's agenda was the Society Network Foundation bid for SAF money, but says "to our knowledge, no advance decision had been made". He says PTA UK decided not to partner with the SNF bid because there was not enough time to make an informed decision before the deadline and it conflicted with a separate PTA UK bid, which was ultimately unsuccessful. In April 2012, the SNF was awarded a grant of £299,800 for Get In.
The Downing Street meeting was a factor in a parting of the ways between PTA UK and Community Inspired, according to Kent. He says the charity's "head had been turned" by the meeting, and the relationship between his company and the charity collapsed.
Kent says the end of the arrangement with PTA UK devastated his business; he has complained to the Charity Commission about PTA UK, but it has not taken any action. The PTA UK spokesman says the relationship ended for commercial reasons. "Our view is that the matter is a distraction," the spokesman says. "The commercial dispute is in the past."
Meanwhile, the BSN continued to develop other projects, including Britain's Personal Best, which Moore devised with the Sky Sports presenter Charlie Webster to help create a legacy from the 2012 London Olympics. The idea was that people would sign up and collect sponsorship to carry out their own personal challenges in October. Moore says the idea, which attracted nearly £1m of funding from the Big Lottery Fund in April 2013, had no support from politicians.
He says charities never bought into the idea and is critical of the efforts of a variety of other civil society organisations whose participation was part of the BLF grant conditions. The event fell flat and the BLF eventually withheld the final quarter of the money.
After the parting of ways between Kent, PTA UK and the BSN, Kent started to look into the funding of the SNF and the BSN from government and public sources. He began putting in Freedom of Information Act requests about how this small charity with little track record had been able to attract extensive funding from the Cabinet Office, the Big Lottery Fund and Nesta.
His inquiries led Gareth Thomas, then shadow minister for civil society, to ask questions in parliament and raise the issue with the National Audit Office, which mounted not one but two investigations into BSN/SNF funding.
Its first investigation, overseen by the director of private and third sector delivery, Victoria Keilthy, and which reported in July 2014, looked at Big Lottery Fund grants totalling £1.8m for Your Square Mile and Britain's Personal Best and the grant of £300,000 from the Cabinet Office for Get In.
It concluded that the Cabinet Office and the Big Lottery Fund breached some of their own procedures and guidelines in the awarding and/or management of the funding. It found that the Cabinet Office had expanded its eligibility criteria after the closing date for applications for its £20m Social Action Fund, failed to identify a lead organisation for a joint bid involving the SNF, against Cabinet Office guidance, and made a payment to the SNF without examining its latest financial position.
The investigation also found that the BLF had not challenged the BSN's "ambitious" recruitment targets for Britain's Personal Best, had failed to consider the effect of the failure to meet those targets and had allowed the grant and the responsibility for Your Square Mile to be passed to Your Square Mile Limited without assessing whether it had the necessary specialist IT skills.
A few days after the report appeared, SNF charity trustees issued a statement denying that the organisation had benefited from political influence to win funding, adding that the charity was now dormant and in the process of being wound up.
At the same time, Liam Black, a former Nesta trustee, tweeted that in 2010 it had been "forced to provide funding for the Big Society Network". But a review in October 2014 by Geoff Mulgan, chief executive of Nesta since 2011, said he could find no evidence that the awards were influenced by government, although his report said Nesta, a non-departmental public body at the time, "clearly did not want to antagonise a recently elected government by refusing any involvement in projects linked to its flagship big society programme, especially since these projects aligned with Nesta's work before the election".
Meanwhile, there had been extensive posting of negative messages under different names about the BSN/SNF on a sector news website that eventually agreed to take down the comments.
The second NAO report, published last November, revealed that the Cabinet Office had received a bid from the BSN for £150,000 of funding to run the Big Society Awards, but had concerns about the organisation's performance.
The matter was referred to the head of campaigns and strategy in the Prime Minister's Office, which sought advice from the Prime Minister's Policy Unit and met Moore and Rose to discuss the matter. "After this, the Prime Minister's Office asked the Cabinet Office to continue with the new grant funding," the report says. "The Minister for Civil Society (Nick Hurd at the time) decided that the grant should go ahead, but subject to clarity over the key performance indicators."
For now, the SNF remains on the commission register, but the BSN was formally dissolved in December. Moore says: "I honestly believe this charity would still have been running Britain's Personal Best and the Big Society Awards but for Kent's intervention."
He also denies that the charity received favourable treatment: "The politics were more significant in killing the project than keeping it alive. The narrative that this was a gilded organisation was false."
Kent says the main cause of the debacle was the failure of the various projects.
"Requesting the FoIs did not cause the demise of the BSN/SNF," he says. "But the contents (from the Cabinet Office and the BLF) may well have done so. However, I was not responsible for the content or the NAO findings."
See Fran's take on this story here