Membership bodies criticise 'confusing' local authority discretionary grant scheme

Research by Third Sector found more than 2,200 small charities in England have accessed at least £17.5m from about 140 councils under the Local Authority Discretionary Grants Fund

Membership bodies have criticised “confusing” and “inconsistent” local authority grant funding after new research found that fewer than half of all councils are willing or able to identify charities when awarding discretionary grants.

Research by Third Sector found thousands of small charities in England have accessed more than £17m in local authority grant funding since the start of the Covid-19 pandemic. 

The Local Authority Discretionary Grants Fund opened for applications in May and closed in September last year.

Councils were asked to prioritise charity properties receiving charitable business rates relief because they were not eligible for small business rates relief or rural rate relief.

A request by Third Sector under freedom of information legislation asked all 339 councils in England how many charities had been awarded funds under the scheme.

It found 2,258 charities had received £17.5m in grant funding, worth up to £25,000 each.

But the actual figure is likely to be much higher, because only 187 of the 339 councils provided a response.

Of that number, nearly 40 either could not provide the data because they they did not distinguish between charities and other organisations, or refused to answer.

This means about 150 councils did not comply with the request within the 20-working-day time limit provided by the legislation. 

Four authorities – Southwark, Barnsley, Tendring and Tanbridge – were the only ones to respond that had awarded grants to at least 100 charities, although the amounts granted varied wildly. 

Southwark awarded 216 charities £407,000 in total, while Barnsley allocated £2.3m to 130 charities.

About 50 councils awarded grants to 10 charities or fewer, while more than 20 councils said they did not award any charities funding under the scheme.

Rita Chadha, chief executive of the Small Charities Coalition, said the findings were similar to those of its own research.

She said: “Local authority discretionary grants have been shrouded in confusion as far as local small charities are concerned. Concerns about eligibility were coupled with inaccessible and dense access systems. 

“When SCC undertook our own FOI inquiry into the situation six months ago, we were shocked to find the number of local councils that were unable to distinguish between who was and was not an eligible charitable organisation. 

“We have seen far too much confusion in the system – which ultimately comes down to the fact that charities are rarely understood and seen as part of the local ecosystem by councils.”

Roberta Fusco, director of policy and communications at the Charity Finance Group, said: “The application of the criteria for funding from the Local Authority Discretionary Grants Fund across different local authorities for charities seems to be patchy at best, and very inconsistent. 

“Charities seem to have been in the vast minority of recipients of overall allocations of funds from this grant, which was one of the few routes of funding accessible to many smaller charities.”

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