Policy, Government and the Voluntary Sector, Fundraising

Closing the data gap on local government grant-making to the VSCE Sector

Rhiannon Doherty, DSC Senior Researcher, highlights the key findings from DSC’s Grants for Good report.

At DSC we believe that grant funding can empower charities and voluntary groups to identify and solve problems and address needs in a way that is centred around people. However, this vital resource has been under pressure over recent decades because of cuts to local authority budgets and the drive to use contracts when commissioning services. 

Back in 2016, DSC launched the Grants for Good campaign in partnership with the Charity Finance Group, Children England, the National Association for Voluntary and Community Action, Clinks and Lloyds Bank Foundation, to influence and educate commissioners on the huge benefits of supporting charities and community groups through grant making.  

Seven years on, DSC remains committed to demonstrating the positive impact of grants. So, recently, DSC’s researchers set out to capture some data on the murky world of local government grant making. To do this, we sent a Freedom of Information request to all local authorities across the UK to find out more about their grant-making to VSCE organisations during 2018/19, 2019/20 and 2020/21. Here’s a quick summary of what we found 

Local authorities spend in the region of £600 million on grants to VSCE organisations annually 

The local authorities that responded to our FOI requests awarded around 40,220 grants worth £333.2 million, in the most recent financial year. When we account for the councils that didn’t get back to us, the actual total value of the grants awarded is likely to be over £600 million. The average individual grant was worth around £12,000 in the most recent financial year. 

Grant making to VSCE organisations appears to be on the rise 

Overall, the total number and value of grants awarded from local authorities to VSCE organisations increased each year from 2018/19 to 2020/21. The biggest increase in grant making occurred during the most recent financial year; this increase may have been in response to Covid-19, but further research is needed to fully unpick this trend. 

Zero councils experienced legal challenges around their grant-making practices 

None of the councils reported legal challenges and just a tiny 0.7% of respondents reported that they had experienced formal complaints around their grant-making to VSCE organisations. This is an especially important finding as it debunks the long-standing myth, often proliferated in commissioning circles, that grants are somehow less legitimate, riskier and more prone to legal challenges than contracts.  

Most local authority grants are awarded via open processes  

Depending on the year, around 75–80% of local authority grants to VCSE organisations were awarded via open (i.e. competitive) application processes. Although this question had the lowest response rate of all DSC’s FOI questions, it still provides strong evidence that local authority grants are predominantly accessible to new applicants, which is welcome news.  

Overall, local authorities’ commitment to transparent data sharing could be improved 

While the majority of councils cooperated with DSC’s FOI request, 12% did not respond, despite DSC’s researchers extending the deadline to 67 working days and sending email reminders. A further 7% denied the request on the grounds of the cost involved. Meanwhile, when local authorities did reply, the quality and comprehensiveness of reported data varied significantly. DSC strongly recommends that local authorities renew their commitment to sharing transparent and accessible data about their grant-making practices and comply with the spirit and letter of the Freedom of Information Act and the Local Government Transparency Code 2015. 

This report has begun to shrink the huge data gap on local authorities’ grant making to VSCE organisations. The next crucial step will be to actively engage in conversation with those who work in commissioning circles, such as local councillors and government officials, and encourage them to work collaboratively with the VSCE sector to design and deliver funding that best supports VCSE organisations and the communities that they serve.

Like to know more? Check out our latest report Grants for Good report here.