Nick Hurd, minister for civil society, has confirmed that future revenue from the £200m Futurebuilders programme will be used to provide grants to stimulate the creation and development of neighbourhood groups, the stated goal of the government's Big Society concept.

Plans to scrap Futurebuilders, which is managed by the Social Investment Business, was mooted in the Conservative party’s manifesto this March. Hurd told Civil Society last week that the plans were definitely going ahead: "Futurebuilders is effectively closed for business now,” he said. 

“We announced in Opposition that our intention was to use future income from its loan book for initial funds for community grants and

The government's plan for the Big Society has as its goal that every citizen can become part of an active neighbourhood group, and the repayments from Futurebuilders loans will be used to progress this. The Futurebuilders Fund was established by the Labour government for quite a different purpose: to provide low-interest loans to civil society organisations that wish to expand their ability to provide public services.

Last week, Stephen Bubb, chair of Social Investment Business, criticised the move in his blog.  He cited the cases of TreeHouse and Rainbow parent-led schools for autistic children:

"In the case of TreeHouse it took nearly 19 years from start to finish. And it required a Futurebuilders loan to make it happen. The lesson here is that parent or volunteer commitment is crucial but not sufficient; it also has to have the capital support that only the government was able to provide. They were both 'unbankable' projects.

"And this should be a salutary lesson to government who are saying they will remove the loan interest repayments due to Futurebuilders and put into a grant scheme, thus depriving the Social Investment Business of the opportunity to support further such parent schools."

Jonathan Lewis, chief executive of Social Investment Business added: “The blend of grants, loans and business support that the Social Investment Business provides is the best way to help civil society organisations become financially sustainable. Grants have their place but both Demos and evaluations by Sheffield Hallam and London Metropolitan Universities found that our method of mixed funding helps organisations become stronger so they can help more people for longer."

Capacitybuilders and v 'under review'

Hurd also said Capacitybuilders and v, a strategic partner of the former Office of the Third Sector, were under review:

“With v we want to be clear what we are funding and what we are getting back,” said Hurd. “v has received a lot of government money over time and it is under no illusion that in the future the funding environment is going to be different.”

Hurd didn’t rule out a cut in funding this year for all the old OTS’s strategic partners, which are in their last year of three-year funding from the Cabinet Office.

“We are reviewing all finance to understand what we are funding and why,” he said. “In terms of short-term needs we are looking at all programmes but very much with the desire to minimise pain for the sector organisations.”

Hurd said the Office for Civil Society was in dialogue with all government departments about potential cuts to the sector. However, he added: “It will be completely unrealistic to say that the sector is going to be completely ring-fenced.

“We are very serious about the Big Society and the voluntary and community sector is at the heart of it, but we are all trying to do more with less and we are all trying to seek efficiencies – that extends to the sector as well.

“But the OCS has a good relationship with other departments, we will remind government to respect the Compact and all the commitments attached to that.”

Hurd will meet a sector body once a week

Hurd also committed to go out and meet a civil society organisation every Thursday to “encourage and learn”.
Last week, he visited Britwell Youth and Community Project in Slough, which has been awarded a Queen's Award for Voluntary Service.

He also said his biggest priorities were to make it easier to run a charity or social enterprise, to encourage more resources for the sector and strengthen its independence through the expansion of the social investment market, and to make life easier for charities that do business with government.