News

New OTS report dubs Futurebuilders a success, while Tories moot plans to scrap it

Finance | Vibeka Mair | 1 Apr 2010

Futurebuilders’ investments generate financial and social returns, as well as savings to the public purse, according to an independent evaluation of the government-funded loan scheme for the voluntary sector.

The report, published today by the Office of the Third Sector, comes as the Conservative Party moot plans to close down the Futurebuilders Fund if elected by the public next month.

Conservative leader David Cameron announced his manifesto for civil society at the end of March with the document Big Society, Not Big Government.

It suggests using future revenue from the £200m Futurebuilders programme to provide grants to stimulate the creation and development of neighbourhood groups.

The document says that future provision of debt for the voluntary sector must instead come from the market and from financing products facilitated by what the Tories call a “Big Society Bank”.

Jonathan Lewis, chief executive of Social Investment Business, which manages the Futurebuilders' Fund, has criticised the Tories' position.

“Futurebuilders is a magical way of investing in the charity sector which has shown many times that it is successful and works. I do not understand why you would stop it. It’s interesting that that we already give money to the organisations that the Tories want to use the money for.”

Lewis (pictured) added that the Conservatives’ assessment of the Futurebuilders fund was based on a National Audit Office report about its first phase, before the Social Investment Business ran it. Its last three years and the new Futurebuilders' report, conducted by Sheffield Hallam University on behalf of the OTS, have not been taken into account, he said.  

The Sheffield Hallam University report found that:

• Futurebuilders selects strong organisations that perform well. It selects a broad range of organisations with varying developmental needs which it provides with appropriate support.
• Fund recycling, both in terms of capital repayments and interest payments, enables funds to be re-invested in the future. The level of default (where investments are written off) was found to be less than five percent of the current investment book.
• Investments were largely found to be additional – investees would not have secured commercial funding at the same scale and the same time.
• Investee organisations were found not to be displacing existing services, and were providing better quality services and/or meeting unmet needs.
• Futurebuilders investments can quickly lead to additional public service delivery.
• Investee organisations offered an improvement in service and in some cases cost savings to funders.
• The services delivered by investees were found to be addressing largely unmet needs or providing innovation in service delivery.
• Futurebuilders investments can have catalytic effects by bringing benefits which would otherwise not have occurred, or not occurred to the same extent.
• Futurebuilders builds the capacity of the third sector to deliver public services, helping third sector organisation win 448 contracts with a value of £96m.

Directory: Futurebuilders England