Unlock £500m National Fund to boost pandemic support for the voluntary sector, Kruger report recommends

The government should make £500m from the National Fund charity available as emergency funds to support the voluntary sector and create a longer-term £2bn endowment to support disadvantaged communities, a report commissioned by the Prime Minister has recommended.

Boris Johnson, in a letter thanking report author Danny Kruger, the Conservative MP for Devizes, revealed that the government was today launching a new framework for public procurement that he claimed “will level the playing field for small business and social enterprises”.

In June the Prime Minister commissioned Kruger, the founder of two charities and Johnson’s political secretary before joining parliament last year, to advise the government on how to make the most of the voluntary sector in the UK’s recovery from the coronavirus pandemic.

Kruger’s wide-ranging 52-page report, published today and titled ‘Levelling up our communities: proposals for a new social covenant’, makes 20 recommendations, which the PM described as “comprehensive and hugely ambitious”.

Kruger recommends the government should disburse £500m of funds to build on the £750m of emergency funding provided earlier this year.

The money should be sourced from the National Fund and could be administered by a consortium of foundations “on the model of The Fore grant-making trust”, he suggests.

The National Fund is a charity established in 1928 with £500,000 and the aim of paying off the national debt.

Its funds have since grown to £500m but, with the national debt approaching £2tn, it is unlikely to ever achieve its goal.

The Treasury has ongoing legal proceedings to release the funds to reduce the national debt, but Kruger says the government should work towards releasing the funds to support civil society.

He proposes the release of a further £2bn from dormant insurance accounts to support the creation of a new endowment, dubbed the Levelling Up Communities Fund.

The LUC Fund should be directed to long-term, transformational projects in local communities and its distribution strategy should be set by parliament, Kruger recommends.

A key theme of the report is the need to reverse a perceived neglect of “community power” in the UK’s recent political economy.

Kruger says: “The economic and social model we need for the future has community power, and the civil society that enables it, at its heart. This is the way to level up the country – to make great places ‘from within’ rather than by outside interventions.”

He also calls for a review of the National Lottery Community Fund to “explore an even more localised, community-led system for distribution”.

He suggests a “community power act”, which would create a “community right to serve”, by which community groups could challenge for a role in the design and delivery of public services.

Aside from funding questions, the report makes several other suggestions with relevance to the charity sector.

For example, its ideas for building on the growth of volunteering and mutual aid sparked by the pandemic include the Charity Commission creating a new status for emerging organisations, and the establishment of a “volunteer passport” system to “effectively match the supply of citizens to the demand for their time”.

He also says policies should be introduced to make it easier to start and run a charity, and create a modern version of the local Council for Voluntary Service.

There is also an ambition for greater and better use of data and digital technology by both government and charities, including priority for the measurement of the social value of government spending and the activity of civil society.

Johnson said the ideas in the report would be considered by the DCMS, and promised Kruger an update on the government’s work from Oliver Dowden, the culture secretary.

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