Headlines: August 1st, 2007



The Audit Commission has found major weaknesses in the programmes designed to support the voluntary sector in the delivery of public services. The Home Office programme to build capacity and infrastructure in the voluntary

sector has failed to deliver to front line organisations. The government-backed investment fund to provide loans, grants, and capacity-building support to help the voluntary sector deliver public services is not benefiting smaller organisations. The Audit Commission’s report sets out recommendations to get the programmes back on track.

The Home Office ChangeUp programme set up in 2004 aims to transform the third sector by building capacity and infrastructure in the voluntary sector so that by 2014 front line voluntary organisations can access high-quality local support for their needs. Between 2004 and 2006 some 72 million pounds was invested in the programme. Government offices for the regions devolved programme management to consortia of local voluntary sector agencies, which bid for funds to improve the local infrastructure. The programme also established six national hubs of expertise from which local voluntary organisations could seek advice on infrastructure issues.

Although the programme had helped in developing capacity, most comments from front line voluntary organisations were negative, because they felt that they had not seen the benefits themselves. There was also a sense of frustration because very little had filtered down to front line organisations.

The government-backed Futurebuilders investment fund provides loans, grants, and capacity-building support to the voluntary sector in delivering public services. Futurebuilders was created so that voluntary sector organisations can access investment funding at a reasonable cost and be able to compete successfully for public sector contracts. The fund also offers development grants, which enable organisations to explore and develop their plans to deliver public services, and then to build their capacity through loans from Futurebuilders or finance from other sources.

Futurebuilders bases its loans scheme on the premise that applicant organisations are likely to be delivering public services under contract in the future and will repay their loans from their income. This requirement causes concerns to both local councils and voluntary organisations. Many voluntary organisations were unsure whether their existing funding arrangements would continue, or where they might find new funding. They were wary of taking on loan finance because they could not be sure that they will win contracts in a competitive environment.

The smaller organisations argue that the presumption that they are likely to delivering services under contract in the future is completely off-putting. To take on a loan without the knowledge that there are longer-term opportunities is too great a risk.

The Commission sets out recommendations for local commissioning bodies, voluntary organisations and central government. It also gives a commitment that it will contribute to the development of the national training programme for third sector commissioning, which the Office of the Third Sector is sponsoring.

The report has been welcomed by the National Council for Voluntary Organisations and by the Association of Chief Executive of Voluntary Organisations.


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