Gareth Jones: It's good to see the government tightening up its grantmaking

02 Oct 2017 Voices

Eagle-eyed readers of Charity Finance magazine, and maybe even some of the normal-eyed, will have noticed that this month’s issue has a fresh new look. Of course, we will still be providing our normal repertoire of high quality, insightful features and analysis, but we were keen to introduce a more modern look and also to make some structural tweaks which should ensure our content is accessible and enticing to read.

I’ll spare you any further navel-gazing. But on the subject of embracing change and making a fresh start, it is worth giving some credit to the government for positive developments in improving its grant practice.

I refer specifically to the National Audit Office’s recent report on its investigation into the government’s Libor fund (see page 7). It confirms what Charity Finance had long suspected – that grants were being handed out based on ministerial patronage rather than following a thorough application process.

The report ought to make uncomfortable reading for the former Chancellor George Osborne (though he may be too busy with his seven current jobs to notice). The report reveals that no less than £385m was awarded on the basis of organisations writing a letter to the Chancellor directly, with only £207m spent through competitive application processes.

However, there are two positives. The first is that the truth is now out in the open, forcing acknowledgement of how badly handled the fund was (the conspiratorially minded might suggest that the Prime Minister is actually quite happy for her foe and arch-critic Osborne being hung out to dry on this one).

The second is that HM Treasury believes that since the Autumn Statement in 2016, its grants have been in accordance with the Government Grants Minimum Standards. The NAO does not state whether it agrees, and the Chancellor retains the final say on any awards, but there does seem to have been a tightening up of practice since the guidelines were introduced and Philip Hammond became chancellor that year.

It will be interesting to see what Libor grants are handed out in the next Budget, scheduled for 22 November.

The Standards were a response to the closure of Kids Company. In this case, Cabinet Office ministers Oliver Letwin and Matthew Hancock had gone against the advice of civil servants to award the charity £3m shortly before it collapsed.

It is worth remembering that we probably wouldn’t even be talking about Kids Company now if the government hadn’t been artificially inflating it by funnelling in millions of pounds without proper scrutiny. Hopefully we will not see a repeat of this sort of lax spending in future.

Gareth Jones is editor of Charity Finance


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