The local infrastructure group Navca has raised concerns about the Big Lottery Fund’s proposed new approach to infrastructure, which could result in more private companies being paid to provide support services to charities.
The BLF published the discussion paper Building Capabilities for Impact and Legacy last year to outline its plans for a £20m infrastructure fund.
It said the BLF had spent £200m on capacity building over the past 10 years, mainly through its now closed Basis programme, but that it now wanted to be "more purposeful in our investment".
The paper said the BLF should move away from its traditional model of giving grants to local infrastructure groups in favour of allowing front-line charities to pay for the support service providers they want.
The paper proposed achieving this by "expanding the support available to front-line organisations from the private sector".
In its submission to the consultation, which ended last week, Navca policy officer Peter Horner says the new approach "poses challenges for Navca members".
Horner says it would increase the funding pressure on local infrastructure groups and provoked other concerns, such as the possibility of companies that won the contracts expecting infrastructure groups to help them for free.
"We are aware of many examples where support providers fail to deliver on their contracts, so organisations in need of support turn to our members, even though they are not funded to provide the service," he writes.
Horner says local infrastructure groups were well placed to fulfil the requirements of the fund because they had the "reach, profile and trust-based relationships with funders, potential customers and suppliers" and that the BLF had created a "false dichotomy" between such groups and alternative providers.
"There is currently little evidence of the effectiveness of demand-led schemes in comparison with the more traditional model of investment, such as grant-funded providers of infrastructure services," he writes.
Horner says the programme might contradict the government’s £30m Transforming Local Infrastructure programme, set up to reduce the number of local infrastructure groups.
"If the BLF wishes to pursue a market-based competitive approach, this is likely, at least initially, to lead to a proliferation of providers and could undermine efforts to rationalise," he writes. "Some may be confident in their products and decide that competing with other providers is likely to be more financially beneficial to them than a planned collaboration or merger."
A BLF spokeswoman said the consultation had generated more than 200 responses.
"We will publish a revised paper later this year, which will include more detailed proposals for our funding as well as responses to the key points that have been raised," she said. "We do not publish individual responses to our consultations."