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Treasury rules could reduce Futurebuilders grants

By Helen Warrell, Third Sector, 13 June 2007

On the eve of its third anniversary, Futurebuilders has warned that recent changes to the structure of government funding will almost halve its capacity to give grants alongside its loans to third sector groups.

The news comes at a time when members of the consortium governing Futurebuilders have called for an increase in the proportion that is given out as grants.

Richard Gutch, chief executive of Futurebuilders, said the new funding from the Treasury would not be spent according to the previous division: 80 per cent capital, which can be spent on loans and grants for building work, and 20 per cent revenue, which is for revenue grants and the organisation's own management costs. Instead, the Treasury has favoured a new ratio of 89:11.

"The grant element may end up being squeezed altogether," Gutch said. "This is completely outside our control. Our preference would be to stay with the 80:20 ratio. We strongly believe the grant element in our full investments is very important. If we didn't have the grant element, it wouldn't work."

However, Gutch added that the fund might generate its own revenue in future. "One of the ways in which we have some flexibility as we go on is that we are getting returns on our investments year by year," he said.