How Veolia's trustees cut costs - but not quality

The environmental charity has had to come to terms with unavoidable falls in income

Community Space Regeneration at Cody Dock, Newham, funded by Veolia Environmental Trust
Community Space Regeneration at Cody Dock, Newham, funded by Veolia Environmental Trust

The need to cut costs is a familiar problem for trustees in the current climate, but no less pressing is the need for the quality of the charity's work to be maintained, even as belts are tightened.

The grant-giving body the Veolia Environmental Trust is no exception. It has recently been forced to take drastic measures to ensure the future sustainability of the charity. The trust is one of numerous environmental bodies that benefit from the Landfill Community Fund, which in the past year have been hit by a triple whammy of cuts to their income.

The LCF takes the proceeds of a tax on rubbish tipped into landfill and distributes them among grant-giving environmental bodies. But in the 2015 Autumn Statement, the percentage of the tax given to the fund was reduced and the organisations benefiting from it were told to cut administration costs from 10 per cent of their overall spending to 7.5 per cent. The trust estimates that its income will fall from about £9.3m in 2015/16 to £3.8m in 2016/17 as a result of the change.

Faced with this challenge, the trustees of the Veolia Environmental Trust decided to axe the charity's four regional panels, which offered specialist insight to the board when assessing projects that applied for funding. Oswald Dodds, chair of trustees, says: "This is not what we would have done or how we would have chosen to do it, but we have to make the best of it.

"We have had panels since the beginning in 1997 - we've enjoyed working with them and they have been very useful. They allowed us to involve more people, local expertise and talent."

For example, he says, a panel with local knowledge might be able to speak up for a community project in a deprived part of an otherwise affluent area, which might have been overlooked for funding.

"We just won't have that expertise available to us any more," Dodds says. "There were up to 48 people on the panels, but only 11 trustees, so it's obvious that some things will be different. But we're determined to make sure the quality of the applications we fund doesn't suffer."

With more of the workload moving to trustees, the first priority was to undertake an audit to determine the skills the board had and what it needed, Dodds says. "We have altered our articles of association to change what we look for in trustees so we're much more specific and can start to fill the gaps, both in terms of skills and in terms of geography," he says. "It's no good having trustees who know about only one part of the country."

The trustees have also assessed their own working methods. The board previously met four times a year and spent about two-thirds of each meeting scrutinising applications and one-third of their time on strategy. But now it dedicates four meetings to assessing applications and deals with strategic priorities in two separate meetings.

The charity has made other changes to its operations to reduce costs and streamline the application process, says Dodds. "We have invested in a new IT system, simplifying the way we ask questions," he says. "People looking for funding fill in an online form, which gives us very clear information and allows us to prioritise the types of schemes we're looking to fund."

The streamlined application process has also reduced the number of telephone calls the charity's office receives, which could also allow the charity to cut the number of office staff it employs - though Dodds understandably has mixed feelings about this particular benefit.

"I hate having to focus on costs, but that's what we have to do," he says.

"Unless we can work with these changes and achieve the same level of insight, the loss of both income and the panels is going to have an impact on us. There's a danger that the quality of decision-making will suffer."

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