BUILDING THE CAPACITY OF THE THIRD SECTOR
Publication of the Committee's 37th Report, Session 2008-09
Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
"Those responsible for ChangeUp and Futurebuilders, two Cabinet Office programmes introduced to build up the expertise and resources of third sector organizations, failed to follow even basic good practice in programme and project management. The fact that these initiatives were experimental is no excuse.
"ChangeUp, which provides support networks for third sector bodies, got going far too slowly. As a result, most of the £80 million funding intended to be spent over three years had to be spent in a rush, in a single year. This led to waste, poor value for money and difficulties for funded organizations.
"Futurebuilders, designed to lend money to frontline third sector organizations without access to commercial finance, has also suffered difficulties. The application process for a loan was too long at first and cost both the fund and applicants too much. Planning has also been poor, with little thought being given to how taxpayers' substantial and long-term interest in the programme's loan book is to be protected.
"It is unacceptable that these significant and expensive programmes were set up without any proper targets for measuring their performance. Both have had some good effect but neither has yet demonstrated value for money. Indeed, given the difficulties in identifying and allocating costs and in identifying and measuring benefits, judging their value for money is going to be no easy task.
"The poor preparation for these programmes and the absence of effective evaluation do not contribute to the credit of the Cabinet Office, especially given the central role it plays in making government work better."
Mr Leigh was speaking as the Committee published its 37th Report of this Session which, on the basis of evidence from the Office of the Third Sector, Capacitybuilders and Futurebuilders England, examined the performance of ChangeUp and Futurebuilders programmes in building capacity in the third sector.
The third sector includes voluntary and community organisations, charities and social enterprises, ranging from small, local community groups to large, established, national and international organisations. The Government's objective in working with these organisations is to strengthen communities, improve public services, encourage social enterprise and support the conditions for the third sector to thrive.
In 2002, a Treasury review found that third sector organisations did not have the appropriate skills and resources ('capacity') to contribute to the delivery of public services to the extent that the Government wanted. To address this problem, in 2004 the Home Office introduced two programmes to build the capacity of the third sector. Both programmesChangeUp and Futurebuildersare now the responsibility of the Office of the Third Sector, part of the Cabinet Office. Together the programmes will cost almost £450 million to 2011.
ChangeUp gives funding to regional and local support providers to form partnerships or 'consortia' to work to provide services to make frontline organisations more effective. It is managed by an executive non-departmental public body, Capacitybuilders. The total cost of the programme will be £231 million by 2011.
Futurebuilders is a £215 million investment fund that invests directly in frontline third sector organisations that would otherwise not have access to commercial sources of finance. It enables them to build their capacity and bid for public service delivery contracts. Income from these contracts is then used to repay the investment. It is managed under contract by Futurebuilders England Fund Management.
Both programmes have made some impact. ChangeUp has led to better partnerships between local support providers, which in turn has had an impact on the capacity of frontline organisations. However, it has no baseline or outcome targets against which achievement can be measured, and the way the programme has been managed has created problems for the third sector. If the improvements brought about by ChangeUp are to be sustained, there are challenges to be met such as finding new sources of income to fund services. Futurebuilders has also had a positive impact, although it did not focus clearly enough on its objectives during its first three years. While targets are now more closely aligned with those objectives, there are barriers to achieving all of its aims. As a result of investments made, the Cabinet Office will have a substantial asset on its balance sheet well beyond the current management contract.