Recent failures of government grant giving, particularly Kids Company, have threatened to give grants a bad name. These occasional, though sometimes high profile lapses have made it all too easy for critics of the sector to describe grants in principle as wasteful and to question statutory funding for charities altogether.
As such, today’s publication by the Cabinet Office of a set of 10 minimum grant-making standards for departments and arm’s length bodies is a positive step. Among them are requirements that strong business cases be made, that grant-making is competitive by default, that grants include agreed outputs and longer-term objectives. They also prescribe proportionate due diligence and training for grant administrators. These are all common sense and features of existing good practice, but it will be very helpful to have them codified in this way.
Perhaps of most interest to the voluntary sector will be standard six. This requires robust grant agreements which include terms of eligible expenditure. This replaces the anti-lobbying clause which was announced in February and subsequently ‘paused’ in April in response to concerns about its impact expressed by NCVO and others.
Since the beginning of the year and continuing after the pause NCVO and our partners have been in an ongoing dialogue with the government on this topic. These exchanges have at times been robust. But today’s announcement shows that the government has listened and acted to address the clear problems in the clause and previous guidance which were raised by NCVO and others. Ministers and officials deserve credit for transforming what was initially a very poorly thought out notion into something that has the potential to be a positive tool for quality grant-making.
Our principal concern with the original clause was that it was counterproductive and would have meant grant-funded charities were unable to provide policy-makers with crucial insight that improves legislation, regulation and public services. This fundamental flaw has been recognised by government and the new guidance is crystal clear in saying that activities such as raising issues with ministers and civil servants, responding to consultations and contributing to the general policy debate are not only permitted but actively welcomed.
And rather than requiring departments to insert the broadly drafted clause into every grant agreement, the new guidance provides much more discretion to departments. A list of likely eligible and ineligible expenditure is provided but the final decision about what is and isn’t allowed in each individual grant lies with departments, which must also ensure that the terms are ’sufficiently clear’.
Questions might be raised over the listing as excluded expenditure of paid-for lobbying, including that done by in-house staff, and petitioning for additional funding (which could encompass additional resources for a population, not just further grants for an organisation). This should not, however, prevent legitimate influencing activity. Firstly, such activity may be allowed if it is a specific requirement of the grant. Secondly, the guidance states that these do not override activities deemed eligible. For example, a charity staff member whose salary is part funded by a grant could still give evidence to a select committee, respond to public consultations, and provide independent, evidence-based advice to government.
Today’s announcement is positive and we are pleased that the government has substantially revised its position. There is still a need, however, for vigilance. A close eye must be kept on individual departments to ensure that the guidance is followed and not overzealously interpreted.
Responsibility will partly lie with grant recipients. If you don’t believe that your grant agreement is in line with this guidance, say so. In particular, if the grant agreement doesn’t provide sufficient clarity about what is and isn’t allowed then this guidance should be referred to. If you’re not comfortable raising these issues with a funder or have wider concerns then please get in touch with Nick Davies or Chloe Stables at NCVO. NCVO will be monitoring this closely and we want to hear from you if there are problems.
The change is, in part, due to a welcome desire on behalf of the new prime minister and her administration to reset the relationship between government and the voluntary sector. While no one would expect any government to agree with charities on every area of policy – indeed charities often have various views themselves – it is essential that we are able to honestly discuss policy and to constructively provide advice based on the sector’s depth of expertise. The new guidance clearly recognises this.
But today also illustrates what can be achieved when the sector stands together. By signing up to joint letters, providing case studies, talking directly to officials and much more, NCVO’s members have enabled us to make a powerful case. Speaking with one voice meant we couldn’t be ignored. I would like to thank all of those who gave so much of their time.
Finally, it’s important to reiterate the potential this guidance has to strengthen government grant making. Using these standards should ensure that grants will always be value for money.