£50m held up by new database

Nearly £50m worth of Section 64 grants have been delayed by the Department of Health for three weeks after it failed to install its new database early enough.

The mixture of project and core funding relates to the 250-plus charities who were recently notified of their grants for the current financial year.

The department has not yet calculated exactly how much is being allocated this year, but a spokeswoman said she does not expect it to be very different from the £48m awarded in 2002/3.

The first instalment of this year's grants should have been in charity hands by mid-April to allow projects to start up and, in some cases, for charities to survive.

But the department said it cannot process any grants until all charity records have been transferred from the old database, which won't happen for another two weeks.

The Prevention of Professional Abuse Network is awaiting £41,000 from the department and only has £5,000 in reserve, which it needs for rent and tax.

"This is unbelievable," said its chief executive Jonathan Coe. "We're disappointed at the delay in payment because our reserves are not sufficient to take us through the next week - this has forced us to negotiate a bank overdraft to tide us over."

He added that Popan's projected position, with more than £200,000 in agreed income, shows how enforced closure would be a waste.

A grants support officer at the department said: "No Section 64 grants have been given out yet because we are waiting for our new database system to kick in."

She said the system had already caused payments to be delayed by three weeks, adding that installation of the Vista database began on 1 April and that they are working to transfer all the charities' details from the old system before making any payments.

A spokeswoman at the department said: "We apologise for the delay in allocating payments to the voluntary and community sector this year, and hope to make a Section 64 General Scheme Grants payments within two weeks.

"The new system has been set up to ensure payments are more efficient in future." She added that the database had been installed at "the earliest possible opportunity".

Millie Barrett, the NCVO's Compact advocacy officer, said: "At the Compact annual meeting last week, the Government committed itself to ensuring that funding processes should be as simple as possible and that risk should be fairly balanced between funder and funded. Neither are being achieved in terms of Section 64.

"We urge the appropriate Government departments to consider either how interim payments can be made to those affected, or to consider compensation for those forced to take out loans."

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