Cabinet Office says some action plan money might have come from Futurebuilders

Tory spokesman Nick Hurd raises concerns after value of loan fund is £31.3m less than expected

Shadow charities minister Nick Hurd has accused the Government of being "less than honest" about money from Futurebuilders being used to help fund the third sector recession action plan.

The Government has in the past denied that the value of the Futurebuilders fund, which issues loans to help voluntary organisations win government contracts, was reduced to finance the £40.5m action plan.

But after the seven-year fund closed for applications two weeks ago, a Cabinet Office spokesman said it was possible that up to £3.5m of action plan money could have come from Futurebuilders.

He said funding allocations not distributed by Futurebuilders, particularly in the earlier years of the programme, had been returned to the Treasury, then partly re-released on application by the Cabinet Office.

Because all the money went to a central Treasury pot, he said he could not be certain exactly how much of the money re-released in this way for the action plan came from Futurebuilders.

The spokesman was commenting after it emerged that the total value of Futurebuilders when it closed for applications was £183.7m - £31.3m less than the £215m originally allocated.

The OTS spokesman said the value of the fund fell "short of our aspiration" but added: "This shortfall is nothing to do with the desire to move money into other funds."

Last April Campbell Robb, then director general of the OTS, told the Public Accounts Committee he remained hopeful that the value had not diminished. Asked by Conservative MP Richard Bacon whether the fund would continue to be worth £215m, Robb said ministers "still aspire to make the fund a £215m fund".

Hurd told Third Sector: "It confirms our suspicions that the Government was less than honest about the action plan. When the question was being asked whether Futurebuilders was being short-changed to fund the action plan, we were assured that the aspiration continued to be for a £215m fund. The question is: what has happened since then?"

Jonathan Lewis, chief executive of Social Investment Business, which has managed Futurebuilders since 2008, said it had met its targets and questions on the reduction of the fund were matters for the Government.

Fact file:

£215m: The amount of money allocated to the Futurebuilders fund when it was launched in 2004

£183.7m: The total amount that will be disbursed by Futurebuilders

£3.5m: The amount of action plan money that could have come from Futurebuilders, according to the Cabinet Office.

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