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Big Society Network's 2012 accounts show £180k deficit

Big Society Network's 2012 accounts show £180k deficit
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Big Society Network's 2012 accounts show £180k deficit2

Finance | Tania Mason | 23 May 2013

Big Society Network has finally filed its 2012 accounts with Companies House, nearly five months late, and the unaudited abbreviated balance sheet shows a deficit at the end of March 2012 of £180,716.

Big Society Network has come under fire recently for receiving several hundred thousand pounds of public funds and not disclosing any of it in published accounts. 

Its associated charity, Society Network Foundation (SNF), was also awarded nearly £200,000 from the Cabinet Office Social Action Fund even though it did not meet the published grant criteria and changed partners and projects after the bid deadline, leading to charges of cronyism. And the project that was funded never got off the ground, so no social outcomes have been achieved.  

Both the organisations involved in awarding the Social Action Fund grant – the Cabinet Office and the Social Investment Business – said that the money was granted on the basis of the “track record” of the organisation’s senior management.

But there are no comprehensive accounts available for either BSN or SNF to demonstrate what that track record is.  The most recent accounts for BSN, just published on the Companies House website today, were submitted nearly five months after the deadline and Companies House even instigated a striking-off order at the start of April, though this has now been withdrawn.

And once again the company has merely produced an abbreviated balance sheet rather than full accounts. It is able to do this because it is a private limited company with income of less than £6.5m and so can claim a small company exemption.  However, this has been condemned by sector accountants as bad practice because public money is passing through the company.

Three directors

The company has three directors; chief executive Steve Moore, external relations director Lucy Winmill, and chair Martyn Rose, who is former co-chair of the National Citizen Service Programme with Michael Gove and former co-chair (with Theresa May) of the Get Britain Working group.  

According to the website the company also employs nine more people.

The 2011 accounts showed a deficit of £25,140.  The latest accounts reveal that this deficit has climbed to £180,716 – even though the company has received at least £725,000 of statutory funds, from Nesta and the Cabinet Office, since its launch in March 2010 up until July 2012.  

The website states that the Network is funded by “a combination of project funding, foundation funds, private donations and business investors”.

The deficit is made up of current assets totalling £14,541 and creditors of £199,783.  Fixed assets amount to £4,526, making an overall deficit of £180,716.  

Parliamentary questions

Earlier this week Gareth Thomas, shadow minister for civil society, tabled a series of Parliamentary questions relating to the government’s funding of Big Society Network. He accused the government of wasting taxpayers’ money on “Big Society vanity projects” and said he would be following the issue closely.

The Big Lottery Fund also recently announced a grant of £1m to Society Network Foundation
to organise a national fundraising challenge event later this year. It said it carried out stringent financial checks on the Foundation before awarding the grant.  Both sets of accounts filed by the Foundation so far show it to have been a dormant company.

Steve Moore did not respond to enquiries.

Gordon Hunter
Director
Lincolnshire Community Foundation
24 May 2013

As BIG Society Network is a start-up company, BIG Lottery will, I am sure, have received financial projections predicting a healthy deficit.
I am not an accountant, so cannot define "insolvency" (something to do with assets and debts?). Perhaps someone qualified can help?

Stephen
Interested Observer
23 May 2013

So Big Society Network are nearly 5 months late filing their accounts and then show a deficit of £180K with no details of their turnover or audit of the money paid to them by the various funds? What sort of due diligence was carried out by the people making the awards? Nesta need to be completely transparent and provide full details of the award and provide details of the social outcomes achieved. They also need to demonstrate that they undertook the same due diligence with Big Society Network as they did with all other awards.

Social Investment Business and Big Lottery Fund also need to provide answers with regard to the awards made to Society Network Foundation. How can both these organisations give £200k and £1m respectively to a company that has filed dormant accounts for two years and is non trading? If the company is dormant then it can have no track record, no employees, no offices or any credibility - it is dormant after all!

For the Big Lottery Fund to state that it carried out stringent financial checks on Society Foundation Network must bring the the entire management of the organisation into question. A two-minute search on Companies House clearly highlights that Society Foundation Network is non-trading. Therefore to give £1m of public money is astonishing and the Big Lottery Fund needs to provide details of the stringent checks involved.

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