Transition Fund criticised over eligibility criteria

Charities can apply only if they expect to lose 30 per cent of taxpayer-funded income for front-line services

Iona Joy, head of charity analysis, New Philanthropy Capital
Iona Joy, head of charity analysis, New Philanthropy Capital

Charities have criticised the application deadline and criteria for the government’s £100m Transition Fund on the grounds that they are unlikely to know whether they are eligible before the fund closes on 21 January.

One of the six application criteria is that organisations must have "evidence or substantial reason to believe, that between April 2011 and March 2012, your organisation will experience a reduction of at least 30 per cent of the taxpayer-funded income you receive for the delivery of front-line public services in England".

Charities have complained that they will not have a clear enough financial plan in place before the deadline because public sector funders will not have made final decisions on funding by then.

Iona Joy, head of charity analysis at the think tank New Philanthropy Capital, said most charities would not hear details about their other statutory funding until February.

"The fact that they can’t apply when they are facing a fairly acute crisis is going to reduce their chance of survival," she said.

Catherine Lacey, director of Oxfordshire Children and Voluntary Youth Services, said it would be hard for organisations in the area to apply because the county council was not going to be releasing information on its grants for the sector until February.

"Most of them aren’t applying at all as it’s hard to justify applying for something they don’t think they’re going to get," she said.

Paul Lawrence, chief executive of the Oxfordshire Association for Young People, said:"We are going to apply but I think it’s going to be very difficult to obtain the funding. 2011 is going to be a very nervous year for us; we’re already looking at redundancies."

Some charities said they were also frustrated by the transition fund criterion that says an organisations can only apply for a grant if 60 per cent of its total income comes from taxpayer-funded sources.

Paul Tuohy, chief executive of the drug prevention charity Mentor, said it was unfair that charities that have acted on advice to diversify their income sources could now be ineligible to apply for a grant because of this.

"It leaves a sour taste in the mouth," he said. "I don’t think it’s a level playing field."

A Cabinet Office spokesman said the application period had been designed to ensure the money got to organisations on the frontline as quickly as possible. 

"This is a short-term fund designed to give civil society organisations and social enterprises breathing space to adjust to a new funding environment," he said.

"Where organisations do not have concrete evidence of the reductions in funding by 21 January, but have strong reason to believe they will be facing reductions of at least 30 per cent in their public funding in 2011/12, they are able to make an application on this basis."

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