The Big Lottery Fund must be more proactive in reducing its costs, should consider opening its board meetings to the public and should examine its governance arrangements, a government review has concluded.
The Cabinet Office’s first triennial review of the BLF, published today, says the main functions of the BLF, such as the distribution of National Lottery funds and money from dormant bank accounts, "remain current and necessary".
But it makes a number of recommendations as to how the BLF can improve.
"The fund needs to be more proactive in driving down costs," the review says. "Although it has taken the 5 per cent operating cost target seriously, it has viewed this as something to be achieved and does not appear to have identified ways to go beyond it, either to reduce overall costs or to reallocate investment elsewhere."
It recommends that the BLF develop a performance metric over time to improve efficiencies throughout the organisation.
The review recommends that the BLF sets out, as a matter of priority, how it will deliver "digital by default, and how this will lead to further efficiencies".
It says the BLF needs to set out how it will deliver already identified reductions in staffing levels and how it can further drive down costs.
The funder has a high manager to staff ratio, of up to 1:4, says the review.
"In terms of structure, there may be scope to rationalise office locations, some of which are historical," it says.
The review suggests the BLF could become more transparent by opening up its board meetings to the public.
It should also be clearer about the role non-executives play in funding direction and decisions at a national level, and should publish information about the number and type of complaints received, the review says.
It says the BLF should "provide more information about the different aspects of its work – specifically the way it allocates dormant bank account funds, its non-lottery funds grant-making, and its international work".
The review finds the BLF broadly complaint with the principles of good corporate governance. But it says it has identified a number of areas in which the funder should improve.
It says the fund has a large number of non-executive directors on its four country committees and overall board, and there appears to be some duplication in what the various groups do.
"The review recommends that the chair ensures the country committees are operating in line with their terms of reference," it says. "This should also include distinguishing where the board and country committees are carrying out a governance or advisory role."
It says the current board "does not reflect the government’s ambitions for diversity in public appointments", and its financial, commercial and risk-management capabilities should be increased.
This should be taken into consideration in the future recruitment of board members, the review says.
A statement from the BLF said it welcomed the report, "which concludes the fund is a highly respected and valued organisation with an important role to play with the voluntary, community and social enterprise sector".
Peter Ainsworth, chair of the BLF, said: "I am confident we are making good progress towards growing and developing the fund’s vision in accordance with many of the recommendations made in the review. I will now be discussing with the board the areas of our work and operations that we can further enhance to ensure the best possible service for our customers and stakeholders."
The BLF said the review would feed into its work on its strategic framework for 2015 to 2021 and its future planning.