Voluntary Action Camden : Grant Aid

London Borough of Camden Set To Review Grant Aid.

Three years ago the Council carried out a comprehensive review of grant aid to the voluntary and community sector. The result was a decision to fund a contribution towards core costs and a commitment to three year funding, a commitment that comes to an end in March 2007. A further review of grant aid is now planned with the results of the review being in place for the financial year 2007/8. In common with other statutory funders there appears to be a keen interest in moving away from grant aid to commissioning. So, what does this mean?

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You can download a full copy of the report Voluntary and Community Sector Funding Review here (Word Format 83kb).

Grant Aid.

Grant aid is commonly referred to as a ‘gift relationship’, i.e. a funder gives support to a group to carry out activities. Over the past few years there has been a drift towards grant aid being linked more tightly with the priorities of funders. In Camden this was by the introduction of the need to show how services helped to achieve the objectives of the Community Strategy and later the Social Inclusion Strategy and the Neighbourhood Renewal Strategy. However the balance was still ‘bottom up’ with groups bidding for funding.

Commissioning.

The word commissioning is quite often used to refer to the purchase of goods or services. This is not the correct meaning and therefore in any discussions that you have it is important to agree a definition with all of those taking part. Commissioning is a much broader process involving a detailed cycle of activity. The process starts with an assessment or reassessment of need, going on to identify the resources available, planning how to use those resources, arranging the delivery of services and finally reviewing the service. The commissioning cycle then starts again with an assessment or reassessment of need. In carrying out the commissioning exercise there are three commonly cited models to choose from. A ‘squire – peasant’ model, a partnership model and a community model. The partnership model and the community model are the approaches most commonly favoured by the voluntary and community sector as they enable the sector to be involved from the very beginning of the process as opposed to being treated as a sub contractor.

Outcome Funding.

Commissioning also brings with it a shift away from output funding e.g. how many under five drop in sessions delivered, to outcome funding e.g. the desired outcome is to improve the physical well being of young children and the funder wants to know how the service that you offer contributes to this. Examples of the outcomes approach in practice can be seen in Camden’s Local Area Agreement and in the working draft of the Children’s & Young People’s Plan.

Procurement.

Another word commonly being used today is procurement and as with the word commissioning it is quite often awarded a different meaning by different people so again it is important to agree a definition before discussions proceed. Procurement, according to the Councils Procurement & Contracts Handbook 2004 represents, ‘the purchasing, the buying aspect of service delivery. It constitutes the actual implementation of commissioning requirements’. In other words it is the ‘arranging the delivery of services’ part of the commissioning cycle. The purchasing and buying of services can take place through a variety of mechanisms ranging from a tightly managed grant aid arrangement (an arrangement favoured by the Association of London Government www.alg.gov.uk), through to competitive tendering, spot purchases and negotiated contracts.

Challenges Posed By Commissioning & Procurement.

Many issues are raised by this proposed move away from grant aid and towards commissioning. There is concern that the independence of the sector will be undermined along with its important role in campaigning and advocacy. A concern in line with the findings of the research by the British Association of Settlements & Social Action Centres, as reported on page 8 of the last edition of Voluntary Matters (March 06). In another report just published by Rocket Science examining the experiences of the 17 boroughs piloting Local Area Agreements it is noted how there is considerable uncertainty over the future of small grants, ‘Any reductions will invariably have a disproportionate adverse effect on black, minority ethnic and refugee community groups which are so critical to social cohesion’. There is also concern that the smaller voluntary and community groups will be marginalised in the commissioning arena with the larger players being more likely to benefit form opportunities to deliver public services. This concern over the future of grant aid has led to the National Council for Voluntary Services Chief Executive to state, ‘I appeal to you to try and defend grant aid budgets’.

The report by Rocket Science goes on to state that, ‘Commissioning services from a broader base of the voluntary sector organisations is also likely to require considerable lead in time in order to equip both funders and providers with the practical tools to ensure that this delivers the theoretical benefits of increased choice, quality and efficiency.’ In the Camden context this raises the question as to whether or not the current timetable is realistic.

What Are We Doing About It?

VAC would like to hear your views on this proposed move from grant aid to commissioning. Do you think that grant aid should remain in place? Do you think that there should be combination of grant aid and commissioning? What model of commissioning would you prefer to adopt? Is it the same for all groups or different for different activities e.g. community centres and community nurseries. How do you think the sector can be an effective voice in a commissioning world? Does the sector need to broker partnerships and consortium between larger and smaller voluntary and community groups? Please email your views to:

Simone Hensby
T: 020 7284 6555
E:Simone Hensby

VAC is also developing a training programme for voluntary and community groups on commissioning and procurement, and the accompanying skills that this requires.

This will be rolling out at the end of May 2006. Further details will be circulated within the next few weeks. For further details contact:

Simone Hensby
T: 020 7284 6555
E:Simone Hensby

Last updated July 4, 2006