OPINION: Hot Issue - Should all the Government's grants be put out to tender?

A Treasury grant of £2.9 million to GuideStar, a project that will put information about charity performance online, has caused controversy as groups argue that other organisations should have been able to apply for the money. Tendering can ensure that grant-makers find the best providers, but it can also be lengthy.



There will be times when government, both central and local, will want to award a grant to a voluntary organisation or community group without going through a tendering process.

Strategic funding, for example, needs to be agreed over several years so that services can be planned consistently, quality achieved, and good staff offered continuity of employment.

This cannot be done in the stop-start world of short contracts. A local authority may want to capacity build a community group developing its confidence to take on a bigger role in community development or service provision.

That said, any grant application process is necessarily competitive. The criteria and scoring system used to decide grants should be open, there should be feedback to unsuccessful applicants and the right to appeal when decisions are based on wrong information.



The prime objective of tendering for contracts and grants is to ensure public funds are used to provide the best service at the best price.

Tendering isn't the only way to achieve best value for public money or to guarantee openness and transparency. The tendering process can be lengthy, bureaucratic, administratively heavy and costly. And, on occasion, tender criteria exclude applications from organisations that provide high-quality, specialist services.

Sometimes, organisations have the specialist knowledge and capacity to deliver services to particular disadvantaged groups. By negotiating directly with these bodies, the Government may get a better deal for the funds available.

A key strength of the sector is its ability to be highly innovative and to adapt itself to meet the needs of our client groups. To apply the tender process in all circumstances, when sometimes there is an obvious specialist candidate, can end up serving the needs of policy-makers, rather than service-users themselves.



Grants should not be required to conform to the Government's clearly laid out procedures for tendering, but contracts should. Anything that increases the bureaucracy and difficulty in applying for grants is not welcomed to put it mildly.

The issue therefore, in light of the GuideStar award, is when is it a grant and when is it a contract for a service provision? Transparency and best practice would suggest that if there is any doubt then put the process through the tendering route. Technically the GuideStar award is probably a grant. It requires substantial matched funding and there certainly doesn't seem to be a prescriptive and tightly defined project methodology.

But is that really so different from, say, Leonard Cheshire applying for a contract to run services without full and true cost being paid by the Govern-ment? Leonard Cheshire successfully argues that it matches funds through bearing the core cost of the project.

Let's be clear that the concept of GuideStar is very much welcomed. The sector needs a way to increase transparency and to openly publish the relatively turgid information that isn't at the heart of a charity yet nevertheless needs to be available.



The only answer can be "yes", a thousand times over. If somebody is going to get government funding, there must be an open, clear and transparent process by which the funds are allocated. This might be tendering for specific purposes or open competition for a tranche of money.

Without this transparency, how can people in the sector know that they are getting the best services, by the best suppliers, and at the best value?

There is still too much money where no transparent process of any sort takes place and still too many grants that depend on knowing the system or the right people.

For every slug of money to the sector, people should be able to see how they could have applied. The Community Fund can manage it. Charitable trusts can manage it. So why are the people who answer "no" to this question so afraid of the same principles applying to central and local government?

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