What’s happening with local authority grantmaking?
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By Jay Kennedy, DSC Director of Policy and Research
The Grants for Good report, published by the charity Directory of Social Change (DSC), illuminates the latest data on local authority grantmaking to the Voluntary, Community and Social Enterprise (VCSE) sector.
DSC submitted Freedom of Information requests to all 378 local authorities in the UK asking key questions about how many grants they made to theVCSE sector and of what value, as well as whether grants were awarded via open processes and if they were the subject of any legal challenges. Just under three-fifths of councils responded in full, with just over one-fifth providing partial responses, and the rest refusing to respond or denying the FOI request.
Analysis for this second edition of the report found similar top-level figures to previous research, but shows that the total number of reported grants fell and the average total grant spending of councils did not keep pace with inflation in the financial year 2023-24.
Reported grants totalled £461.9m in 2023-24, but this likely under-counts the true value due to the substantial number of partial or non-responses. Modelling the value of grants from non-respondent councils suggests that the annual value of all local authority grants in the UK is around £600m.
The report also shows evidence that increasing pressure on local authority finances is taking its toll on local authority grants. This edition of the report includes a new section and analysis on those councils filing Section 114 notices – the equivalent of bankruptcy – and its effects. Respondent councils experiencing financial hardship were much more likely to have reduced grant spending than those which weren’t.
Other findings show that nearly 80% of councils reported that their grants were awarded via open or competitive processes, and the instances of legal challenges to councils’ grantmaking were almost non-existent. This data supports the argument that making grants to support services or activity in the community delivered by VCSE organisations is not legally risky or invalid as part of commissioning, and that councils can legitimately make grants to local VCSE organisations.
The report also details a range of other findings and data about local authority grantmaking which are not available elsewhere. It concludes that half of councils responding to data requests spent less than £520,000 on grants, and the average grant given by councils is £13,000.
Despite providing public money for public benefit, local authority grantmaking remains an area that is unnecessarily difficult to research. This second edition of the report again finds that too many local governments are still not responding to FOI requests in a timely fashion or at all, and that local government transparency around grant-making remains poor despite multiple initiatives to improve it.
For more information and to download a free digital copy of DSC’s Grants for Good report see www.dsc.org.uk/grantsforgood.
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