Capacity-building programmes 'suffered from administrative errors'

ChangeUp and Futurebuilders have done some good, says chair of Public Accounts Committee, but financial administration has been a mess

The sector capacity-building programmes ChangeUp and Futurebuilders have done some good but have suffered from "administrative failures", according to Edward Leigh MP, chair of the House of Commons' Public Accounts Committee.

He was commenting on today's National Audit Office report on Futurebuilders, set up in 2004 to help voluntary organisations bid to run public services, and ChangeUp, which was set up in 2003 to help build the sector's infrastructure and has been run since 2006 by arm's-length public body Capacitybuilders.

"ChangeUp has set up support networks for third sector organisations and Futurebuilders has helped by lending money directly to charities and voluntary groups," said Leigh, Conservative MP for Gainsborough. "But the effects of these programmes have been varied.

"It is astounding, for example, that ChangeUp was established without setting any outcome targets. Its financial administration was a mess from the start.

"There was an underspend of £8m in the first three years and third sector organisations had to spend £80m in only 21 months, leading to taxpayers' money being wasted. Furthermore, services that ChangeUp has established will run into difficulties if they do not secure alternative financing.

"Futurebuilders also encountered difficulties with one basic flaw - that its own users do not fully understand how it works. About half of the organisations that the NAO spoke to did not know that their loans had to be repaid."

Nick Hurd, the shadow charities minister, asked why the report had taken two years to produce. "I still can't understand why the publication of this report was delayed so long," he said.

"It tells us what we already knew: that the Government botched the set-up of ChangeUp. It was designed badly, without a clear value-for-money framework and unclear objectives - another example of time and taxpayers' money being wasted. "

Kevin Brennan, Minister for the Third Sector, said the Government was working hard to develop third sector organisations that can play a bigger role in society and public services.

He said: "The Capacitybuilders and Futurebuilders initiatives pioneer ways of supporting the sector, so it is great news that they are having a positive impact. I am pleased that the report finds we have dealt with many of the early problems. I want to ensure that we continue to develop our approach to get the best value for money possible."

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