A not-for-profit company run by a member of the Big Lottery Fund’s Wales Committee has received more than £2.8m from BIG over the last five years.

Mike Theodoulou is chairman of CBSA (Wales) Ltd, an independent membership organisation constituted as a not-for-profit company limited by guarantee. 

According to its website, CBSA – the Centre for Business and Social Action - provides business support services, lobbying and representation, training and skills development and networking opportunities to Welsh businesses and individuals to help them boost their economic and social impact.

Since January 2009, CBSA (Wales) Ltd has received six separate tranches of funding from the Big Lottery Fund, ranging in size from £344,818 to £807,686 and in length from two years to four years.

Three of the grants were from the People and Places 2 Fund; the other three were contracts awarded via procurement through BIG’s Lifeskills programme.

The funding is for projects that aim to break the intergenerational cycle of worklessness, improve the job prospects of carers and former carers, and support young people at risk of becoming Neet (not in education, employment or training).

Theodoulou has been chief executive or chairman of the company for around 15 years and a BIG Wales Committee member since 2008.

CBSA has published full accounts three times since 2005, but for all the other years, it has submitted abbreviated accounts – all that is required by a small company. Asked if he did not feel that the regular receipt of lottery money warranted publishing full accounts, Theodoulou admitted he had "never really thought about it". But he added: “We try to be as transparent as possible.”

Conflicts 'need to be managed'

Asked whether he felt there was any conflict of interest in his role as funding recipient and BIG Wales Committee member, Theodoulou replied: “Sometimes there are decisions that need to be taken about a sector and it would be a poorer exercise if you didn’t have practitioners helping you come to the right decisions. But when you do have practitioners in those positions there is always potential for a conflict of interest and what matters is how you manage that.”

He said there are strict protocols within BIG for managing conflicts - but also within CBSA. “When my organisation decides to apply for funding, there is a process within my own organisation which means I cannot be involved in the development of that process,” he said.

“I can be involved in discussions about a new business idea but if it’s an idea that would be pursued through the Big Lottery Fund then I do not get involved in the development of the project.”

And within BIG, he said, all Committee members must fill out an annual form which is publicly available, declaring all relevant interests of their own and their family. And whenever an issue arises where a Committee member has an interest, that must be declared in advance and a corporate governance officer decides how it should be treated.

“I am not allowed in the building whenever a CBSA project is being considered,” Theodoulou said.  “I have never taken part in any decision about our funding. It is taboo and more than my life is worth.”

CBSA 'at a disadvantage'

Pressed on whether he felt there was any risk that his position on the Committee and his relationship with its other members could influence their judgement on funding decisions, Theodoulou said that if anything, it could put CBSA at a disadvantage because the grants committee will give even tighter scrutiny to CBSA’s applications precisely because of Theodoulou’s involvement.

“Although I don’t personally believe that, the people back here at CBSA quite often think that damn good projects have been turned down because of my involvement with the Big Lottery,” he said.

“Over the years we’ve probably had more grants turned down than have been awarded, so our strike rate is not that impressive.”

The last full accounts published were for the year to 31 March 2010, but Theodoulou told civilsociety.co.uk that CBSA made a profit of around £100,00 last year and the latest accounts, due to be published shortly, would also record a small profit.

The company has changed its name several times.  In March 2012 it became the Chamber for Business and Social Action (Wales) Ltd; before that it was Mid and West Wales Chamber and previous to that it was Foothold (Wales) Ltd and Foothold Youth Enterprise Agency.

BIG responds

A Big Lottery Fund spokesman said the Wales Committee sets the strategic direction and policy framework for funding programmes in Wales; however, decision on applications and projects funded are made separately.

He added that Theodoulou does not normally sit on the committee that awarded the grants and contracts to CBSA and its predecessors; however, he was a Wales committee representative on the People and Places committee in October 2010 that gave a £48,752 grant to Foothold.

Theodoulou’s declaration of interest is noted in the minutes, the spokesman said, “and he took no part in the discussions or decisions on this award”.

Theodoulou also pointed out that the organisation was receiving lottery funding before he became involved with it. He also said that other organisations represented on the Wales Committee – specifically WCVA, whose CEO Graham Benfield is a member, had received more funding than CBSA over the years.

Theodoulou is also chair of the Big Lottery Fund's Community Asset Transfer Fund and the People's Millions Fund.