The Cabinet Office vetoed its own appointed grantmaking advisory panel in order to make a £300,000 grant to Big Society Network’s charity, the National Audit Office revealed today.
The damning NAO report on the public funding of Big Society Network and its charity Society Network Foundation lists a catalogue of failures by the Cabinet Office and Big Lottery Fund to properly consider relevant information and follow their own guidelines in awarding money to the two organisations.
The NAO opened its investigation into the funding awarded to BSN/SNF after Civil Society News ran a series of stories last year exposing irregularities in the grants. Our investigation prompted Gareth Thomas MP, then shadow minister for civil society, to accuse the government and BIG of showing favouritism to Big Society vanity projects, and he urged the NAO to take action.
Society Network Foundation and its trading arm Big Society Network have received more than £3m from government and lottery sources since they were launched with David Cameron’s backing just after the 2010 election.
The NAO investigation centred on three specific grants to the two organisations – a BIG grant of £830,000 for Your Square Mile in February 2011; £997,960 from BIG for Britain’s Personal Best in April last year, and £299,800 in April 2012 from the Cabinet Office Social Action Fund for the Get In project.
Outcome targets were missed for each of the first two projects; Get In, a youth fitness programme, never even launched.
Get In – Cabinet Office, £299,800
The NAO’s findings on the Cabinet Office grant show that the government decided to fund the Get In project even after the grantmaking advisory panel convened by its own appointed fund administrator, the Social Investment Business, had rejected the original bid for not meeting eligibility requirements.
Even though the Social Action Fund had attracted more than 1,400 applications, the Cabinet Office expanded the eligibility criteria after the application closing date and asked the Social Investment Business to reconsider four bids, including Get In.
It then solicited and approved a joint bid from British Sports Trust and Society Network Foundation (SNF), but “did not establish a lead organisation to receive the funding and it issued separate grants to the two organisations, which was contrary to the Cabinet Office’s own guidelines”.
The NAO also found that the Cabinet Office made the second payment to SNF to cover the cost of remedial action to try and bring the project back on track, but did not consider the latest information from SNF which showed the project was in surplus.
The report added: “The Cabinet Office has now withdrawn its funding to the Get In project although it has not so far recouped any unspent funds.”
It added that the Charity Commission is still making inquiries to determine whether the charity’s transfer of the remainder of the Get In grant to unrestricted funds was in accordance with the grant conditions, and whether this transfer was correctly reported in the charity’s accounts.
Your Square Mile – Big Lottery Fund, £830,000
The NAO concluded that BIG failed to challenge the “ambitious targets” set for the Your Square Mile project and did not enforce a £76,457 VAT refund “despite clear evidence the project was not achieving its aims”.
It allowed responsibility for Your Square Mile to transfer, along with the grant, from Big Society Network to Your Square Mile Ltd without assessing whether the new team had the skills to deliver the project.
Britain’s Personal Best – Big Lottery Fund, £997,960
The NAO also criticised BIG for failing to consider the fact that the same team who were struggling to meet targets for Your Square Mile were the architects of Britain’s Personal Best “and the projects shared similar delivery risks”.
And BIG “did not consult the Cabinet Office to take into account the performance of the Society Network Foundation in managing the Get In project”.
BIG has already withdrawn the grant for Britain’s Personal Best but will not require any money to be paid back.
Cabinet Office: These are 'minor issues'
A Cabinet Office spokeswoman said the department expanded the eligibility requirements for this fund because it wanted to see as good a range of potential projects put forward.
"The original criteria risked excluding newly-formed organisations and it became clear that as a result highly innovative projects would be out of scope.
"This government's pioneering work to build a bigger, stronger society is showing real returns. Since May 2010 we have seen 80,000 graduates from National Citizen Service, the world's first social investment bank launched, public service mutuals increase tenfold and the largest ever transfer of assets into the charitable centre.
"We are backing organisations which encourage people to volunteer and use their talents to help others. Society Network Foundation won a grant to deliver such a programme, but despite their efforts and our support, it was unable to make it work and so we ended our funding.
"Trying new things and being innovative means taking sensible risks. The mistake is not trying something new – it is to keep doing something that has been shown not to work. We welcome the NAO’s report which highlights minor issues that we have already sought to address and are learning lessons from this episode."
