The Cabinet Office is seeking to recover almost £34,000 from Big Society Network for money that was “not spent in line with the grant agreement”.

The Cabinet Office flouted its own rules to award a Social Action Fund grant of £299,800 to Big Society Network’s parent charity, Society Network Foundation, in 2012.  

However, the Get In childhood fitness project that the grant was meant to pay for never even launched, and the final £100,000 of the grant was withheld by the government. But £200,000 was spent.

A long-running investigation into Big Society Network funding by Civil Society News eventually led to a National Audit Office probe, which confirmed that the Cabinet Office flouted its own guidelines to ensure that Big Society Network received money.

Yesterday the shadow minister for civil society, Lisa Nandy, used Cabinet Office questions in Parliament to pester the new charities minister, Brooks Newmark, about the issue.

She said: “Thanks to the National Audit Office’s report, we now know that the government’s Big Society lies in tatters.

“We have since learned that the charity the Prime Minister personally launched at No 10 Downing street is not only under investigation by the Charity Commission, but is under investigation for moving Cabinet Office funding to its parent company, which is chaired by a major Conservative party donor who also earned hefty consultancy fees from it.

“Was the Cabinet Secretary aware that government funding was being transferred not to the thousands of legitimate charities in this country, but to the bank account of a Conservative party donor?”

Newmark’s reply was the first indication by anyone in government that Big Society Network’s directors might be required to pay back some of the money they spent. He said: “This allegation has been investigated by the grants manager, and appropriate action to recover any funds not spent in line with the grant agreement is being taken.”

Civil Society News then asked the Cabinet Office whether any money was indeed being sought from Big Society Network, and a spokesman confirmed: “As per the minister’s comments this allegation has been investigated by the grants manager, and appropriate action to recover any funds not spent in line with the grant agreement is being taken currently.

"The figure that we are seeking to recoup is £33,994.”

Civil Society News revealed in February this year that Society Network Foundation had transferred part of its restricted Social Action Fund grant into general funds, without gaining permission from the funder. As a result of this story the Charity Commission began its own investigation, which remains ongoing.

As recently as last month, the trustees of Society Network Foundation issued a statement insisting that they had been given authorisation by the Cabinet Office to move the unspent Social Action Fund grant into general funds.

The directors of Big Society Network and Society Network Foundation have now applied to Companies House to have the companies struck off the register; however an objection has been lodged against Society Network Foundation’s application. It is not known who lodged the objection but it is typically someone that is owed money by the organisation.

Steve Moore, the chief executive of Big Society Network, declined to comment this morning.

Nandy presses Heywood for more answers

Meanwhile Lisa Nandy is also continuing to press Cabinet Secretary Sir Jeremy Heywood for further answers on the Big Society Network funding debacle.

She wrote to Sir Jeremy in July after the National Audit Office published its much-delayed report into the irregularities in the awarding of grants by the Cabinet Office and Big Lottery Fund to BSN/SNF, and Sir Jeremy replied earlier this week.

He admitted that the Cabinet Office’s own grantmaking process was “not followed as well as it might have been in one or two instances” but his letter made no mention of the money being recouped by the Cabinet Office.

Nandy wrote back to him this week, claiming that “your reply did not address any of the major concerns I raised with you or the Prime Minister”, and demanding more detailed answers to a number of questions.

A few months after the Cabinet Office pulled the plug on the Get In project, the Big Lottery Fund awarded Big Society Network £1m for an Olympic legacy project called Britain’s Personal Best, but this too failed and BIG withdrew the grant and withheld the final £250,000.  BIG has not required any money to be repaid.