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July – December 2008 Councillor Diane Thomas (Chair) Councillor Kath Banks Councillor Jack Cookson

Third Sector Task and Finish Group. Duration of the review. July – December 2008 Councillor Diane Thomas (Chair) Councillor Kath Banks Councillor Jack Cookson Councillor RJ Farooqui Councillor Jinny Pearce Councillor Mark Shurmer Mrs Ann Sowton

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July – December 2008 Councillor Diane Thomas (Chair) Councillor Kath Banks Councillor Jack Cookson

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  1. Third Sector Task and Finish Group Duration of the review July – December 2008 Councillor Diane Thomas (Chair) Councillor Kath Banks Councillor Jack Cookson Councillor RJ Farooqui Councillor Jinny Pearce Councillor Mark Shurmer Mrs Ann Sowton from the Bromsgrove and Redditch Network (BARN) Jess Bayley December 2008 The picture on the front cover was taken during the Redditch Borough Council Voluntary Sector Consultation Event 21 November 2008 Task and Finish Group membership Co-opted Member Overview and Scrutiny Support Officer Date for submission of report Front cover picture Third Sector Task and Finish Review 1

  2. Third Sector Task and Finish Group THIS PAGE IS INTENTIONALLY BLANK 2 Third Sector Task and Finish Review

  3. Main Contents Page Introduction page 7 Recommendations page 8 Background page 11 Review Scope page 15 Approach to the Review page 16 Consultation Event page 18 Recommendations: Further Information Recommendation One page 28 Recommendation Two a page 39 Recommendation Two b page 40 Recommendation Three page 43 Recommendation Four page 45 Third Sector Task and Finish Review 3

  4. Main Contents Page Recommendation Five page 47 Recommendation Five a page 48 Recommendation Five b page 49 Recommendation Five c page 50 Recommendation Five d page 48 Recommendation Five e page 50 Recommendation Five f page 52 Recommendation Six page 54 Conclusion page 57 Consultation Event – Expert Witnesses page 58 Expert Witnesses page 60 Additional Thanks page 61 4 Third Sector Task and Finish Review

  5. Main Contents Page Appendix A: Shopping, Investing and Giving page 62 Appendix B: Redditch Sustainable Community Strategy 2008 – 2011: Summary page 64 Appendix C: Officer Costs (this appendix is available separately from the report pack). Appendix D: Delegate Pack Information (this appendix is available separately from the report pack). Bibliography page 72 Website References page 76 Glossary page 81 Overview and Scrutiny Contacts page 83 Third Sector Task and Finish Review 5

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  7. Introduction This report represents the culmination of a six month review into the Council’s grants process. We were commissioned to undertake this review on behalf of the Council’s Overview and Scrutiny Committee. In the report you will see that we have undertaken a thorough investigation of the Council’s grants process and of the various options that could be utilised to improve funding arrangements at the Council. We have produced a number of recommendations which we feel, if they are adopted, will make the Council’s grants process fit for purpose from 2010/11 onwards. This report should be read in conjunction with the brief presentation report produced by Councillors Shurmer and Thomas on behalf of our Group. Third Sector Task and Finish Review 7

  8. Recommendations • We RECOMMEND that • the Council adopt a written Grants Policy and Procedure; • 2a) the Council’s purpose for funding the third sector should be aligned to the following mission statement “Redditch Borough Council supports Voluntary and Community Sector organisations because we believe that a vibrant third sector is vital to our community”; • 2b) the criteria for grants applications be aligned to the Redditch Sustainable Community Strategy priorities; • the Shopping, Investing and Giving funding framework be adopted for the Council’s grants process; • 4) the Council officially endorse the Worcestershire Compact; 8 Third Sector Task and Finish Review

  9. Recommendations • 5) further work be undertaken into the following issues: • a) a review of ways to enhance Voluntary and Community Sector involvement in the Redditch Partnership; • b) a review of the Council’s provision of non-grant support to the Voluntary and Community Sector; • c) a review of how the Council should meet its responsibilities as set out in the Worcestershire Compact agreement; • d) a review of how the six equalities strands could be embedded in the working practices of Redditch Borough Council and the Redditch Partnership; • e) a review of the Council’s procurement code; and • f) a review of how multi-year funding arrangements should be implemented as part of the Council’s grants process; and Third Sector Task and Finish Review 9

  10. Recommendations • subject to the successful submission and approval of a revenue bid, the Council introduce a clerical support role in the policy team to support the grants process; or • subject to funding using a portion of the grants budget the Council introduce a clerical support role in the policy team to support the grants process. 10 Third Sector Task and Finish Review

  11. Background National Context • Increasingly, in recent years, central government has been promoting the need for a thriving third sector. • The government has recognised that the third sector has a significant role to play within society, including: delivering public services; campaigning for change, promoting social enterprises and strengthening communities (Office of the Third Sector, 2008). • As part of this commitment two national performance indicators have been introduced that relate to the third sector. These national performance indicators encourage local authorities to build capacity within the sector: • National Indicator Six: ‘Participation in Regular Volunteering’; and • National Indicator Seven: ‘An Environment for a Thriving Third Sector’ (this • national indicator encourages consideration of more than just providing financial • support to the sector). • Local Authorities are not legally required to distribute funding to third sector organisations. However, many Councils do provide financial support. The arrangements for providing financial support to the third sector vary between Councils. National Performance Indicators Local authority grants processes Third Sector Task and Finish Review 11

  12. Background Current Redditch Borough Council grants arrangements Redditch Borough Council currently allocates grants and donations to third sector organisations from the Council’s Grants Fund. The Council allocates grants and donations from this grants fund in a number of different ways: Core Funded organisations: The Council provides some larger grants which cover core funding costs. Five organisations received core funding in 2008/09. Collectively, these core funded organisations received £184,980 from the Council. Donations: The Council also donates funds to third sector organisations. Two organisations received donations from the Council in 2008/09. The total cost of these two donations was £18,000. Project Grants: Third sector organisations can apply for Project Grants valued at up to £10,000. Applicants must demonstrate that the Project Grant will be used to finance new work. Project Grants are not designed to cover core costs. Start-Up Grants: New and fledgling organisations are eligible to apply for Start-up Grants. Applicants can apply for grants valued at up to £1,000. 12 Third Sector Task and Finish Review

  13. Background Current grants process Under current arrangements at Redditch Borough Council applications for funding are made on an annual basis. The Council has one submission date each year which applies to applications for all grants and donations. Each application is scored in accordance with a set criteria. This criteria is linked to funding priorities, including the Council’s priorities. In recent years the criteria has been linked to the themes for the Redditch Sustainable Community Strategy. (For further information about the Redditch Sustainable Community Strategy please refer to Appendix B). The Council’s Grants Panel awards the scores to each application. The Grants Panel recommends that the applications which receive the highest scores should be approved for funding by the Executive Committee. In recent years a number of incremental changes have been made to the Council’s grants process. These changes were made in response to the local, regional and national context. However, these reviews did not resolve all of the problems with the Council’s grants process. Consequently, in 2007 a Task and Finish review of the Council’s grants process was proposed with a view to devising a new process for 2010/11 onwards. Recent history Third Sector Task and Finish Review 13

  14. Background Problems with Redditch Borough Council’s grants process • A number of problems with the Council’s grants process have been identified in recent years through exercises such as internal audit reports and through consultation with representatives of the third sector in 2005. • These problems include (in no particular order): • a lack of continuity in the grants process, particularly in relation to Officer support. • There have been seven Officers in post to support the Council’s grants • process in the course of five years; • inconsistent linking of grants to Redditch Borough Council’s priorities; • weak monitoring arrangements (monitoring arrangements at the Council have • been strengthened over the past year); • a cycle of dependency amongst a number of third sector organisations on Council • sources of funding; • procurement issues, particularly overlaps between the grants process and • procurement arrangements that have not been resolved; and • a lack of confidence in the Council within the sector, mainly for the reasons listed • above. 14 Third Sector Task and Finish Review

  15. Review Scope Objectives of the review The Third Sector Task and Finish Group was established in July 2008. We were commissioned to undertake a strategic review of the Council’s overarching approach to funding third sector organisations. We were specifically tasked with reviewing the Council’s arrangements for awarding grants and donations to third sector organisations. We were asked by the Overview and Scrutiny Committee to bring forward proposals that would shape the Council’s grants process from 2010/11 onwards. There were a number of relevant issues which were not contained within the remit of our review. We feel that it is important to mention these areas as this informed the context for our review. We were not asked to scrutinise additional forms of non-grant support that the Council provides to third sector organisations (such as peppercorn rent arrangements). We were also not tasked with reviewing the specific grants awarded to individual organisations as part of the current grants process. This remained the preserve of the Council’s existing Grants Panel. Exclusions from the review Third Sector Task and Finish Review 15

  16. Approach to the Review Task and Finish Groups are informal working groups which do not hold meetings that are open to public attendance. However, from the beginning of our review we were aware that the subject would be of interest to local third sector organisations. For this reason we made our review process as transparent as possible. We introduced a bespoke webpage on the Council’s website which provided information about the review. Visitors to the Council’s website were able to access copies of the agenda and notes from meetings of the Group on this webpage. To view the information provided on the Council’s Third Sector Task and Finish Group webpage please use the following URL address: http://www.redditchbc.gov.uk/democracy/mgCommitteeDetails.asp?ID=238 We also added a feedback form to the Council’s homepage to advertise our review. We invited representatives of local third sector organisations to use this feedback form to advise us of their interest in the review and of any concerns they had about the Council’s grants process. We were appointed to the Third Sector Task and Finish Group because of our interest in the subject and, in many cases, because of our experiences of working in the third sector. Throughout the review we declared our personal interests. (Further information about us and our interests can be found in Appendix D). Transparency Declarations of Interest 16 Third Sector Task and Finish Review

  17. Approach to the Review Initial analysis We embarked on the review in July in 2008. We began by reviewing the Council’s existing grants process and the sustainability of funding the third sector. We interviewed the leaders of the Conservative, Labour and Liberal Democrat Groups at a meeting of our Group on 14 August 2008. We felt that it was important for us to understand the views of the political party groups represented on the Council towards the grants process. In particular, we believed that it was important to determine their opinions of the sustainability of funding the third sector and of the purpose of the grants process. The political party group leaders’ responses indicated that they agreed in the sustainability of the Council’s grants process. They all commented on the valuable role played by third sector organisations, particularly in delivering public services. They had mixed views about the Council’s purpose for funding third sector organisations. They were broadly in support of the Council awarding grants in accordance with wider considerations, such as the Redditch Sustainable Community Strategy vision. They did not, though, provide a specification for the purpose of the grants process. Councillor Interviews Third Sector Task and Finish Review 17

  18. Approach to the Review Councillor Interviews The political party group leaders cautioned against linking the criteria for grants applications to a single theme. This had been attempted in 2005/06: all applicants had had to demonstrate in their applications that the project for which they were applying for funding was linked to the theme of community safety. This theme-based process had not been considered a success and had been discontinued in subsequent years. We also interviewed the Deputy Chief Executive on 18 August 2008 to determine her views of the Council’s purpose for funding third sector organisations. She explained that there could be a number of objectives for the grants process. She suggested that when considering the purpose Councillors should remain aware of expectations at the local, regional and national levels. There also needed to be consideration of the added value that the Council’s grants process could ultimately provide for the community. She noted that the Council could operate the grants process with a view to enhancing capacity within the third sector; to address gaps in service provision; and to target particular groups within the local community. A more detailed record of the evidence provided by the political party group leaders and the Deputy Chief Executive can be viewed in notes from the relevant meetings of the Task and Finish Group on the Council’s website. Officer Interviews 18 Third Sector Task and Finish Review

  19. Approach to the Review External interviews We agreed that it was important during the review for us to learn from other local authorities about alternative grants processes. The grants processes in place at a number of local authorities were scrutinised. We decided to concentrate on arrangements in place at comparable local authorities and in Councils within Worcestershire. We agreed that this would enable us to determine both what types of arrangements could feasibly be implemented in Redditch as well as the types of grants processes that many local third sector organisations would already be familiar with. We selected two local authorities for more detailed analysis: Gloucester City Council and Worcestershire County Council. These were both authorities which had grants processes that the Improvement and Development Agency had praised as examples of best practice (I&DeA, 2008). We interviewed relevant Officers from both of these authorities. We also dispatched questionnaires to a number of comparable local authorities: East Staffordshire Borough Council, South Bedfordshire District Council; and Stevenage Borough Council. We received one response to this questionnaire which was treated as confidential. Questionnaires Third Sector Task and Finish Review 19

  20. Approach to the Review Gloucester City Council Gloucester City Council was a comparable sized local authority and had recently changed its grants processes following an internal review. We felt that we could learn something from a Council that had gone through a similar critical process of analysis. The Officers from Gloucester City Council explained that they had a much wider remit than administering a grants process in that they managed a Voluntary and Community Development Team. They also utilised specific funding arrangements in the form of engaged funding. The Engaged Funding framework required Officers at Gloucester City Council to work closely with a third sector organisation to develop a funding proposition. The engaged funding arrangements also provided Officers with an opportunity to identify needs within those organisations; to advise organisations about alternative sources of funding; and to advise those organisations about additional sources of support, such as the support provided by local infrastructure organisations. We were impressed by the engaged funding arrangements at Gloucester City Council which we felt enabled that Council to develop close working relations with local third sector organisations. We also felt that this proactive form of engagement helped the Council to develop a positive reputation within the third sector. 20 Third Sector Task and Finish Review

  21. Approach to the Review Worcestershire County Council Worcestershire County Council operates the Shopping, Investing and Giving model of funding. This funding framework has been increasingly promoted by central government as an example of best practice. During the course of the interview Officers explained that Shopping, Investing and Giving had only been introduced in recent years. The implementation of this funding framework had been relatively successful. Moreover, local third sector organisations had become familiar with the funding framework and were applying to receive financial support from the Council. (Further information about Shopping, Investing and Giving can be found in Appendix A). The Officers from Worcestershire County Council were concerned about the lack of awareness of the Worcestershire Compact agreement within relevant local public agencies. They explained that the principles contained within the Compact agreement represented best practice and that more needed to be done to embed these principles into wider local authority working practices. (Further information about the Worcestershire Compact is provided on pages 45 - 46). Third Sector Task and Finish Review 21

  22. Consultation Event We agreed early in the review that we wanted to engage representatives of the third sector in the Task and Finish Group exercise. We felt that it would be good practice to engage representatives from the sector as they would be affected by any recommended alterations to the Council’s grants process. Furthermore, during the course of the exercise we were made aware of the outcomes of a similar review that had been undertaken by Leicester City Council. That Council’s grants process had been altered following their review. This action had subsequently been subject to a judicial hearing, which had criticised the Council for not providing appropriate advance notice to the third sector organisations most affected by the changes. Leicester City Council had also been criticised for not having consulted with the third sector during their review. Early in our review the five third sector organisations in receipt of core funding, as well as the two organisations in receipt of donations from the Council, were advised in writing that we were undertaking this review of the grants process. They were also advised that the Council would be altering its grants process from 2010/11 onwards. Engaging the third sector Notice of change 22 Third Sector Task and Finish Review

  23. Consultation Event We discussed various options for engaging representatives of the third sector in the review. Throughout we aimed to ensure that any form of engagement that took place was conducted fairly. We recognised that we could have interviewed representatives of the third sector. However, we only had six months to complete our review and would not have had enough time to interview everybody who would have been interested in participating. We felt that this would have been unfair to many third sector organisations as well as to their service users. We also rejected engaging third sector organisations through questionnaires as we were aware that questionnaires did not always elicit high response rates. As a Group we agreed that an open Consultation Event would be the most appropriate method for engaging the third sector in our review. We were anxious to ensure that this Consultation Event was widely advertised to provide a fair opportunity for representatives from across the third sector to participate in the review. We promoted the Consultation Event in variety of ways: through advertisements in the local newspapers; by providing information at local Neighbourhood Group meetings in October 2008; and the Bromsgrove and Redditch Network (BARN) circulated information to local third sector organisations. Reasons for holding a Consultation Event Promoting the event Third Sector Task and Finish Review 23

  24. Consultation Event The Voluntary Sector Grants Consultation Event took place on Friday 21 November 2008. We hosted the event at Redditch Town Hall. Twenty five representatives of local third sector organisations attended the event (further details about the range of delegates present during the Consultation Event can be found on pages 60 - 61). We issued delegate packs to all participants prior to the event. These delegate packs provided further information about the terms of reference for the review and the aims of the event. (Copies of the documentation provided in the delegate packs are provided in Appendices A, B and D). We were anxious to ensure that the Consultation Event represented a meaningful opportunity to engage with representatives of the third sector. For this reason we devised a mixture of information and interactive sessions for the event. We provided delegates with information about the work of the Task and Finish Group and the aims of the review. Delegates were advised that as we were undertaking a Task and Finish Review we had no decision making powers but that we could make recommendations based on the evidence that we had gathered during our review. Programme for the event Information sessions 24 Third Sector Task and Finish Review

  25. Consultation Event We also offered a number of interactive sessions during the Consultation Event. Many of these interactive sessions were completed in the form of group activities. These interactive sessions encouraged delegates to think about the wider considerations involved in managing a local authority grants process. The contributions made by delegates during the Consultation Event were considered by us at subsequent meetings of the Third Sector Task and Finish Group and informed our final recommendations. In particular, we reviewed responses provided during the interactive group activities; during a question and answer session; in completed evaluation forms; and during an exploration of some of the key issues which the third sector felt should be addressed by the Council. A number of representatives from the third sector suggested that more Consultation Events should be hosted in future by the Council as this could facilitate positive working relations between the Council and third sector organisations. We feel that the Council may wish to consider this proposal further and to host Consultation Events on appropriate occasions. However, we are also aware that an opportunity for third sector organisations to consult with representatives of the Council is already made available during the quarterly networking meetings of the Bromsgrove and Redditch Network (BARN). Relevant Officers attend these meetings, though we think the Portfolio Holder for Corporate Management should consider accompanying them in future. Interactive sessions Lessons learned during the Consultation Event Third Sector Task and Finish Review 25

  26. Three Key Statements • During the course of the Consultation Event delegates proposed three key statements on behalf of the third sector for the consideration of the Council. • Redditch Borough Council should ensure that the needs of the Borough are • considered when making decisions. In the absence of this awareness some • needs within the Borough may fail to be addressed. • Redditch Borough Council should ensure that some basic expectations inform • decisions about distributing funding to third sector organisations. Funding should • be fairly distributed across different communities and organisations within the • Borough. The Council should seek to fund organisations that serve a range of • communities as well as to award funding to a mixture of small, medium and large • organisations. Background Statement One Statement Two 26 Third Sector Task and Finish Review

  27. Three Key Statements • Redditch Borough Council needs to develop more proactive communications • arrangements. The Council should do more to publicise local events and • opportunities, including opportunities for third sector organisations to apply for • funding. The achievements of, and activities delivered by, third sector • organisations using Council sources of funding should also be publicised. • Relevant articles in a Council newspaper could help to address this issue. The • Council could invite representatives of local third sector organisations to contribute • relevant articles to a Council newspaper. • We feel that both Councillors and Officers should take due regard of these key statements and should consider how they could inform the Council’s working practices. Statement Three Conclusion Third Sector Task and Finish Review 27

  28. Recommendation One – Further information Recommendation One We recommend that the Council adopt a written Grants Policy and Procedure. We discovered during our review that Redditch Borough Council does not currently have a written Grants Policy and Procedure. In recent years draft Grants Policies have been produced, though the contents of these documents have not been based on the type of overarching review that we have undertaken. None of these draft documents were approved by full Council. The subject of a Grants Policy was discussed with all of our expert witnesses. We discovered that it was not unusual for a local authority not to have a Grants Policy and Procedure. In fact, many local Councils refer to their local Compact agreements as their Grants Policies. However, the benefits of a Grants Policy are recognised. A Grants Policy provides an opportunity to explicitly define the basic working principles for a grants process. Our expert witnesses also acknowledged that use of a Grants Policy and Procedure could help to embed the principles of the local Compact agreement into a Council’s working practices (for more information about the Worcestershire Compact see pages 45 - 46). We believe that this absence of a Grants Policy and Procedure document has had a detrimental impact on the Council’s grants process. In particular, we feel that the 28 Third Sector Task and Finish Review

  29. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. lack of consistency and the numerous reviews of our grants process, which have taken place in recent years can, in part, be linked to a lack of definite terms of reference for the process as contained within a policy. We also feel that a written Grants Policy would provide greater clarity about our grants process, to the benefit of local third sector organisations. We are aware that producing a Policy and Procedure requires a lot of work from Officers. We felt under these circumstances that we should provide Officers with some guidelines about the specifications that we felt should be incorporated into this document. The specifications detailed here are based on examples of best practice identified by us during the course of our review. a) The Council should utilise the Shopping, Investing and Giving funding framework. As part of our review we are recommending that the Council adopt the Shopping, Investing and Giving funding framework (For further information about this recommendation please refer to pages 43 - 44). We feel that this funding framework should be embedded within Council procedures in the long-term. We therefore feel that it is appropriate for the recommendation to be incorporated into the written Grants Policy and Procedure. (Further information about Shopping, Investing and Giving is provided in Appendix A). Third Sector Task and Finish Review 29

  30. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. b) The Council’s mission statement, (as recorded in recommendation two a), should be included within the body of the Policy and Procedure document. We are recommending that the Council should adopt the mission statement that we are proposing in recommendation 2a. (For further information about recommendation 2a please refer to pages 39 - 40). As part of this recommendation we are proposing that this mission statement should be regarded as the purpose for the Council’s grants process. We feel that, if approved, it would be appropriate for the purpose of the Council’s grants process to be acknowledged in the Council’s written Grants Policy and Procedure. c) The Executive Committee and full Council should make decisions about what should be bought by the Council when “Shopping” for services. The Shopping element of Shopping, Investing and Giving, will have greater financial implications than typical grants arrangements. We feel that under these circumstances any decisions about Shopping arrangements should be considered by statutory Committees at the Council as part of a democratically accountable process. Specifically, we believe that it would be most appropriate for the senior decision making body at the Council, the Executive Committee, to make decisions about these Shopping arrangements. Any decisions would be subject to approval at full Council and would need to be made in accordance with guidance from expert Officers. 30 Third Sector Task and Finish Review

  31. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. d) Shopping arrangements should be funded using a portion of the grants budget (See Appendix A and recommendation 3, pages 43 - 44 for more details about Shopping); The Shopping part of the funding framework will comprise of large funding arrangements, whether in the form of a contract or in the form of a Strategic Grant. This needs to be financed using Council funds. We recognise, though, that in the present economic climate it might not be appropriate to require individual services to assume responsibility for financing Shopping arrangements. Instead we feel it would be more appropriate for Shopping arrangements to be financed using funds from the existing grants budget. We recognise that, by funding Shopping using a portion of the grants budget, there will be a limit to the amount of Shopping arrangements that could be agreed in any given period. We also recognise that the Council will need to ensure that a portion of the grants budget is retained in any given year to finance Investing and Giving. We do not feel that it would be appropriate to set a specific limit for the portion of the grants budget that should be allocated to Shopping arrangements. We would resist setting limits on the division of the budget between Shopping and the Investing and Giving parts of the framework as we feel that this might prevent the Executive Committee and full Council from awarding some contracts or Strategic Grants that could lead to significant improvements in service delivery. Third Sector Task and Finish Review 31

  32. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. e) Third sector organisations should have opportunities to bid for both Strategic Grants and contracts as part of the Council’s Shopping arrangements (the latter option would be subject to the review of the Council’s procurement code, as set out in recommendation 5e, page 51). During the course of the review we discovered that the Shopping part of the Shopping, Investing and Giving funding framework could be organised in two different ways. The standard version of Shopping involves negotiating contract arrangements. These contracts can be Service Level Agreements (SLAs) or contracts, though only contracts represent legally binding agreements between the Council and third sector organisations. For contracts the Council would put a service out to tender and organisations would need to bid to deliver the service. Any contractual arrangements would need to be organised in accordance with the Council’s procurement code, and if valued at over £36,000, would be subject to European procurement laws. (Please see recommendation 5e, page 51 for further information about the procurement code). Worcestershire County Council operates slightly different Shopping arrangements by providing Strategic Grants. Strategic Grants are larger grant settlements, which are subject to a bidding process similar to contract arrangements. However, Strategic Grants are not subject to European procurement laws. 32 Third Sector Task and Finish Review

  33. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. We feel that both contractual arrangements and Strategic Grants should be made available because we think that this will provide the Executive Committee and full Council with the flexibility needed to offer the most appropriate Shopping arrangements. f) There should be annual decision making about funding for the both the Shopping, Investing and Giving parts of the framework. We feel that annual decision making for all parts of the Shopping, Investing and Giving funding framework represents the most appropriate way to manage the grants budget at present. We feel that annual decision making about funding arrangements is a more manageable process for the Council. Furthermore, annual decision making should enable both the Executive Committee and the Grants Panel to schedule specific dates for consideration of funding arrangements, in line with the Council’s corporate calendar. We recognise that there may be a need to reconsider this principle if our recommendation for further work to be undertaken reviewing the potential use of multi-year funding arrangements is approved. (For further information please refer to page 38). Any such review could lead to recommendations that might conflict with yearly decision making about funding arrangements. Third Sector Task and Finish Review 33

  34. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. g) The Council’s Grants Panel should continue to make decisions about grants awarded as part of the Investing and Giving side of the framework, although this will be subject to members of the Grants Panel receiving training on assessing and making decisions about applications for funding. We believe that the grants involved in the Investing and Giving part of the funding framework will be smaller than the funding awarded as part of the Shopping process. Under these circumstances we feel it would be appropriate for the Executive Committee to continue to delegate decision making for this part of the funding framework to the Grants Panel. We reviewed the work of the Grants Panel and agreed that the involvement of Councillors in the grants process encouraged democratic accountability. However, during the course of our review we were concerned to discover an absence of training for members of the Grants Panel. We believe that some form of training should be provided to all members of the Grants Panel, particularly in relation to assessing grant application and monitoring forms. This training should be provided prior to the Panel making decisions about funding to ensure that all decisions are made in accordance with recognised standards of best practice. 34 Third Sector Task and Finish Review

  35. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. • h) Decisions about grants and donations should be made in accordance with assessment of need rather than in accordance with demographic considerations. • During the Consultation Event the criteria for assessing the distribution of funding to third sector organisations was discussed. The majority of delegates were resistant to distributing funding in accordance with demographic considerations. Instead, they suggested that funds should be allocated according to needs: in terms of the needs of third sector organisations and also the needs of the different social groups within the Borough. As a Group we endorsed this view. • Organisations should demonstrate an outcomes focus in applications for funding. • We feel that one of the weaknesses of the current grants process is an absence of an outcomes focus to funding arrangements. We feel that a grants system with an outcomes focus represents best practice. An outcomes focus should not be confused with a focus on outputs: outputs, in the context of a grants process, are the activities and services that are provided as a consequence of funding, whilst outcomes are the overarching changes that the organisation aims to achieve through delivering those activities or services. • We believe that if an emphasis was placed on an outcomes focus the Council would have access to more information about the likely consequences involved in funding a particular project or activity, which would be useful when assessing applications. Third Sector Task and Finish Review 35

  36. Recommendation One – Further information j) The Council’s funding application forms should be aligned with Worcestershire County Council’s application forms. During the course of our review we considered the impact of local authority bureaucratic application arrangements on local third sector organisations. The delegates at the Consultation Event explained that some organisations lacked the capacity, particularly in the form of personnel trained to complete different types of application forms, to devote to the application process. In part, this situation could be addressed through investing in training that would develop skill sets within those organisations. (For further information about Investing please refer to Appendix A and pages 43 – 44). We discussed application processes with Officers from Worcestershire County Council and suggested that by aligning our application forms we might be able to simplify application processes within Worcestershire to the benefit of local third sector organisations. The Officers at Worcestershire County Council were supportive of this proposal. k) Monitoring arrangements should be commensurate with the size of the grant provided. We believe that the information required from organisations for monitoring should be more detailed for organisations in receipt of greater sums of money than for organisations in receipt of smaller grants. This is required under current arrangements but we feel it should also be specified in the written policy. Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. 36 Third Sector Task and Finish Review

  37. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. l) Organisations should be able to secure full cost recovery with all applications for full cost recovery being assessed on a case by case basis. During the Consultation Event full cost recovery was discussed with delegates. Participants were in agreement that provision should be made for full cost recovery where appropriate. They explained that when full cost recovery arrangements were not made available third sector organisations often were placed in a position where they could find it difficult to fund the staff required to administer a project or activity for which funding had been approved. Under these circumstances the continued delivery of that activity or project could be threatened. Full cost recovery should not be confused with funding core costs. Full cost recovery involves sharing an organisation’s core costs among its projects or areas of work. The share of the core costs allocated to each project should be directly related to the amount of the core costs that will be required to deliver that project. Moreover, full cost recovery need not necessarily entail large grant settlements, as it may relate to covering basic administrative or minimal staffing costs for a small third sector organisation. We feel that on balance, to ensure the sustainability of the projects to which we award funding, the Council should make full cost recovery arrangements available. These should be requested by applicants on a case by case basis to ensure that full cost recovery is only made available where appropriate. Third Sector Task and Finish Review 37

  38. Recommendation One – Further information Recommendation One: We recommend that the Council adopt a written Grants Policy and Procedure. m) Small grants should be regarded as sums valued at a maximum of £5,000 and large grants should be regarded as grants valued at over £5,000. As a Group we discussed the appropriate sizes for the various grants that could be made available as part of the Investing and Giving parts of the funding framework. We agreed that both small and large grants should be made available as we recognised that organisations might require a variety of sums to support different projects and activities. This was confirmed by delegates during the Consultation Event. We assessed arrangements in place at other local authorities as part of this discussion. There were local variances, but sums valued at under £5,000 were frequently regarded as small grants in many local authorities, including Gloucester City Council. We therefore believe that this interpretation of the appropriate sizes of small and large grants is based on examples of best practice. Our specification for what constitutes a small grant as opposed to a large grant has implications for the Council’s monitoring arrangements. (For further information about the Council’s monitoring arrangements see recommendation 1k, page 36). 38 Third Sector Task and Finish Review

  39. Recommendation Two a – Further information Recommendation Two a We recommend that the Council’s purpose for funding the third sector should be aligned to the following mission statement “Redditch Borough Council supports Voluntary and Community Sector organisations because we believe that a vibrant third sector is vital to our community”. Throughout our review we felt that it was important to establish what the Council’s purpose for providing funds to the third sector should be. As a group we agreed that the purpose for providing funding was important and that it should inform the Council’s grants process. We discussed the purpose of the grants process with all of our expert witnesses. Following our interviews with the expert witnesses we came to the conclusion that there was no agreed purpose for the Council’s grants process. This does not appear to be untypical in the context of local government as few external authorities appear to have an approved purpose for their grants processes. We decided that it would be appropriate for us to develop a mission statement that could encapsulate what we felt should be the purpose of the grants process. This mission statement was developed with a view to demonstrating the Council’s commitment to continuing to support the third sector because of the contribution that they make to the local community. Indeed, we feel that this mission Third Sector Task and Finish Review 39

  40. Recommendation Two a – Further information statement will become increasingly significant over the next few years as third sector organisations are invited to deliver more public services in line with central government advice. We feel that commitment to supporting a vibrant third sector, as stated in this mission statement, is also in keeping with one of the Council’s new priorities: ‘Enterprising Community’. This represents a commitment to supporting organisations that could deliver projects and activities which might have a beneficial impact on the local community in a variety of ways. We recommend that the criteria for grants applications be aligned to the Redditch Sustainable Community Strategy priorities. As part of the current grants process the Council’s criteria for grants applications is aligned to the Redditch Sustainable Community Strategy themes. There are six themes in the Sustainable Community Strategy: communities that are safe and feel safe; a better environment for today and tomorrow; economic success that is shared by all; improving health and well-being; meeting the needs of children and young people; and stronger communities. We felt that these themes were extremely broad and that they could be used to justify awarding funds to any project. As a group we questioned whether this arrangement represented value for money and felt that change was required (for more information about the Redditch Sustainable Community Strategy please refer to Appendix B). Recommendation Two a: Aligning the Council’s purpose for funding the third sector to the mission statement Recommendation Two b 40 Third Sector Task and Finish Review

  41. Recommendation Two b – Further information Recommendation Two b: the criteria for grants applications be aligned to the Redditch Sustainable Community Strategy priorities. • We believe that aligning the criteria for grants applications to the Redditch Sustainable Community Strategy priorities would be appropriate for the following reasons: • it demonstrates Redditch Borough Council’s commitment to meeting the needs of • our local residents; • it demonstrates our commitment to working in partnership with the third sector to • meet local needs; • it demonstrates Redditch Borough Council’s commitment to other local partners; • the Redditch Sustainable Community Strategy priorities currently correspond with • Redditch Borough Council’s priorities; • the Sustainable Community Strategy priorities are more specific than the themes, • which should help to ensure that projects which receive funding are consequently • aligned to a more defined criteria than under current circumstances; and • the Sustainable Community Strategy priorities correspond with the purpose for • funding third sector organisations that we are proposing in recommendation 2a. Third Sector Task and Finish Review 41

  42. Recommendation Two b – Further information Recommendation Two b: the criteria for grants applications be aligned to the Redditch Sustainable Community Strategy priorities. During the Consultation Event we suggested that aligning the criteria for grants applications to the Redditch Sustainable Community Strategy priorities might be one of our proposals. The majority of delegates were supportive of this proposal. They recognised that the Council needed to apply some form of criteria when assessing applications for funding. This convinced us that we would receive support from the third sector for this alteration to the grants process. However, we are aware that there is no guarantee that the priorities of the Redditch Sustainable Community Strategy will remain aligned to the Council’s priorities or that the Sustainable Community Strategy document will remain a permanent fixture of local government. Therefore, we agreed that this arrangement should be reviewed frequently and should not be recorded in the Council’s Policy and Procedure document. 42 Third Sector Task and Finish Review

  43. Recommendation Three – Further information Recommendation Three We recommend that the Shopping, Investing and Giving funding framework be adopted for the Council’s grants process. Increasingly, central government has been promoting the benefits of Shopping, Investing and Giving, as a flexible funding framework. (More detailed information about Shopping Investing and Giving can be found in Appendix A). This framework is designed to broaden the funding opportunities available to third sector organisations. Shopping refers to the Council choosing an organisation to deliver a service or project on their behalf. Shopping arrangements can be implemented in a variety of ways including through contracts or Strategic Grants (see recommendation 1e, page 32). Investing refers to the Council providing funding to develop capacity in the third sector. Investing arrangements can include the allocation of grants to local infrastructure organisations to help build capacity within third sector organisations. Investing can also involve providing grants or donations to organisations to address training needs or to help develop a business plan for an organisation or project. Giving refers to the Council providing funding to Voluntary and Community Sector organisations to support their independent roles. This generally entails the provision of standard grants and donations to third sector organisations. Third Sector Task and Finish Review 43

  44. Recommendation Three – Further information Recommendation Three: We recommend that the Shopping, Investing and Giving funding framework be adopted for the Council’s grants process. • Worcestershire County Council currently operates a model of Shopping, Investing and Giving. This funding framework was introduced following a best value review which had concluded that improvements could be made to the Council’s grants process. The Council has been cited as an example of best practice since they introduced the Shopping, Investing and Giving funding framework. • We feel that the Shopping Investing and Giving funding framework would be suitable for Redditch Borough Council because: • it ensures that there can be flexibility in the provision of financial support to third • sector organisations; • it creates numerous opportunities to work in partnership with third sector • organisations; • it is the same model as that which has already been implemented at • Worcestershire County Council, which should help to clarify funding requirements • to the benefit of local third sector organisations; • the investing arrangements could help to address some of the potential problems • with dependency on Council sources of funding, (as detailed on page 14); and • it corresponds with central government guidance. 44 Third Sector Task and Finish Review

  45. Recommendation Four – Further information Recommendation Four We recommend that the Council officially endorse the Worcestershire Compact. The Worcestershire Compact agreement is an agreement between the Statutory Sector and the third sector. The agreement sets out how organisations from both sectors can work together to deliver the best services possible to people within Worcestershire (the Worcestershire Compact, 2006). The Compact originated in the form of a national Compact, which was agreed by central government and the third sector in 1998. The national Compact represented an agreement between partners for mutual development in their working relations. The Worcestershire Partnership co-ordinated the negotiation of the Worcestershire Compact, which was launched at an ‘Improving Voluntary and Community Involvement in Worcestershire’ event in June 2006. The Worcestershire Partnership established a subsidiary body, the Engaging Worcestershire Steering Group, to maintain and monitor the Worcestershire Compact. Local Compact agreements have been developed and agreed in Counties across the Country. Compact agreements contain principles outlining best practice for maintaining relations between the statutory and third sector. We discovered during our review that an absence of familiarity with local Compact arrangements appeared to be fairly common across local government. Third Sector Task and Finish Review 45

  46. Recommendation Four – Further information Recommendation Four: We recommend the Council officially endorse the Worcestershire Compact However, during the course of our interviews with external expert witnesses we discovered that embedding the principles contained within a local Compact in a Council’s working practices was regarded as a key element in best practice grants processes. Officers from both Gloucester City Council and Worcestershire County Council explained that they were anxious to ensure that their local Compact agreements were embedded in working practices at their Councils. We feel that embedding the principles of the Worcestershire Compact into working practices would represent best practice for Redditch Borough Council. Unfortunately, during the course of the review it became apparent that the Worcestershire Compact had never been officially endorsed by the full Council in Redditch. We believe that this situation is unacceptable. We are therefore recommending that Redditch Borough Council officially endorse the Worcestershire Compact agreement. 46 Third Sector Task and Finish Review

  47. Recommendation Five – Further information Recommendation Five We recommend that further work be undertaken into the following issues: During the course of our review we became aware of a number of areas relevant to the subject of our review which we felt required further consideration. Unfortunately, due to the narrow scope of our review, we did not feel that it would be appropriate for us to investigate these issues in further detail. For that reason we are recommending that further work be undertaken to address the issues detailed in recommendations 5a-5f. We have not provided any specifications for the arrangement of these additional reviews. We recognise that these reviews could be conducted by a number of different groups including: another Task and Finish Group; a Council Advisory Panel; a statutory Committee; an Officer review group; or by a subsidiary group of a local partnership organisation. In part, the appropriate style of review will be determined by the subject and the availability of Council resources to commit to that review. Under these circumstances we feel that the Executive Committee, advised by senior Officers, should decide which review arrangement would be appropriate for each recommended piece of further work on a case by case basis. Third Sector Task and Finish Review 47

  48. Recommendation Five – Further information Recommendation Five a: We recommend that further work be undertaken We recommend that there be... a review of ways to enhance Voluntary and Community Sector involvement in the Redditch Partnership. The Redditch Partnership is the Local Strategic Partnership in Redditch. Local Strategic Partnerships bring together representatives from public, private, community and voluntary agencies to work together to identify improvements that are needed in local service delivery which cannot be made by any one organisation working alone. The partnership approach allows the Local Strategic Partnership to plan and deliver a range of projects, services and initiatives that meet these identified needs. The Redditch Partnership has a board of Directors. At present, there is one third sector representative on this board. We feel that further opportunities for involving representatives of the third sector in the work of the Redditch Partnership could be explored. During the Consultation Event the issue of the involvement of representatives of the third sector in the Redditch Partnership was raised during the concluding question and answer session. Delegates were broadly in favour of there being more opportunities for representatives of the third sector to get involved in the work of the Redditch Partnership. 48 Third Sector Task and Finish Review

  49. Recommendation Five – Further information Recommendation Five a: We recommend that further work be undertaken We recognise that the Redditch Partnership is a body which operates separately from Redditch Borough Council. Under these circumstances, if this recommended piece of further work is approved, we think that it might be appropriate for the review to be undertaken by a subsidiary group of the Redditch Partnership. We recommend that there be...a review of the Council’s provision of non-grant support to the Voluntary and Community Sector. We were provided with a very specific scope for our review. We were tasked with scrutinising the Council’s approach to awarding grants and donations to third sector organisations. We recognise, however, that the Council provides additional forms of financial support to third sector organisations which we were not tasked with reviewing. These additional sources of financial support include the following: peppercorn rents; discretionary rate relief; discounted access to services; partnership agreements; and financial contributions from the civic fund. Throughout the exercise we recognised that these additional sources of financial support were of importance both to the third sector and to the Council, particularly in the current economic climate. Consequently, we feel that the arrangements for providing this additional support should be reviewed to ensure that they are fit for purpose both for the Council and for local third sector organisations. Recommendation Five b Third Sector Task and Finish Review 49

  50. Recommendation Five – Further information Recommendation Five c: We recommend that further work be undertaken We recommend that there be… a review of how the Council should meet its responsibilities as set out in the Worcestershire Compact agreement. We feel that the official endorsement of the Worcestershire Compact agreement, as set out in recommendation four, should be only the first stage involved in embedding the principles of the Worcestershire Compact agreement into working practices at the Council. As a Group we believe that the principles contained within the Worcestershire Compact agreement represent best practice for managing relations between the Council and the third sector. For this reason we agree that a review of how the Council should meet its responsibilities as set out in the Worcestershire Compact agreement would be a worthwhile exercise. We recommend that there be…a review of how the six equalities strands could be embedded in the working practices of Redditch Borough Council and the Redditch Partnership. There are six equalities strands which have been recognised in consecutive pieces of legislation: age; disability; gender; race; religion or belief; and sexual orientation. As a Group we are aware that the subject of equalities and diversity is increasingly regarded as an important area for consideration in a public sector context. We therefore feel that it is important for the Council to review how these equalities strands should be embedded in local working practices, particularly the grants process. Recommendation Five d 50 Third Sector Task and Finish Review

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