Essex County Council offers its reward cash to local charities

£2m endowment fund set up with council's bonus payments for hitting targets

Essex County Council has become the first local authority to allocate funding from its local area agreement specifically to the voluntary sector.

The money will be used to establish a £2m endowment fund to support charities in the county. It will open for applications in the autumn.

The fund is being set up with a performance reward grant awarded by government to the council for achieving local area agreement targets.

"This shows that the council recognises the voluntary sector does an enormous amount of work and has a profound effect on the area," said Laura Warren, chief executive of Essex Community Foundation, which will manage the fund on behalf of the council.

Warren said the foundation was likely to award £100,000 in its first year. A panel, consisting of representatives from the third sector, the local area agreement management board and Essex County Council, will decide the funding criteria.

Council leader Lord Hanningfield said the endowed fund would "make a significant contribution to the development of a healthy and thriving third sector".

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