Hodge 'alarmed' by Big Society funding despite warnings

Chair of the Committee of Public Accounts Margaret Hodge said today she was alarmed that the Cabinet Office continued to fund Big Society initiatives even though the minister and officials were aware of financial instability in the organisations running them.

Her comments were made to accompany the publication of the National Audit Office's (NAO) follow-up report into grants made by the Cabinet Office to the Big Society Network and the Society Network Foundation.

"It’s alarming that the Cabinet Office continued to fund the Society Network Foundation, despite concerns over the charity’s poor performance and financial health," said Hodge.

"In April 2013, Cabinet Office acted on advice from the Prime Minister’s Office before renewing funding and paying a bridging grant to cover its immediate costs. This is all after Cabinet Office officials advised the minister for civil society that it would not be appropriate to grant fund an organisation that is struggling to manage its financial affairs." 

The NAO follow-up investigation – which was launched to discover if there were systemic issues in the way the Cabinet Office and the Big Lottery Fund awarded grants – found that the Big Society Network and the Society Network Foundation were awarded an additional £980,000 in government grants to the £2,130,000 previously investigated in July, despite officials warning that the money was not being used effectively.

In May 2012 the Cabinet Office gave £350,000 to the Big Society Network and Society Network Foundation to run the Big Society Awards. Then in December 2012 the Cabinet Office withdrew funding from the Big Society Network for the Get In programme due to poor performance.

It’s hard to believe that government’s decision to renew funding was in the best interests of the taxpayer.

According to the NAO report, in February 2013 the then minister of civil society, Nick Hurd, judged the Big Society Network to have performed poorly as a whole in its work on supporting the government's objectives for the Big Society and in April he received advice from officials regarding its financial sustainability.

Despite financial concerns being raised, a month later the prime minister's office asked Hurd to renew funding so he awarded the Big Society Network and Society Network Foundation an additional £150,000 – which was subsequently paid by the Cabinet Office. On top of this grant the prime minister's office also recommended that a £12,500 bridging grant be awarded to cover the costs of delivering the Big Society Awards.

Hodge said: "It’s hard to believe that government’s decision to renew funding was in the best interests of the taxpayer."

She added that over a year later, the Society Network Foundation applied to be wound up and the Cabinet Office decided to take over the operation of its work.

The initial NAO investigation, which received national media attention and was published in July 2014, focused on two grants awarded by the Big Lottery Fund – one of £830,000 for the Your Square Mile project and the other of £997,960 for the Britain's Personal Best project – and one by the Cabinet Office – of £299,800 for the Get In project.

The July 2014 report found issues with how the Cabinet Office and the Big Lottery Fund awarded and managed those grants so commissioned this follow up investigation to determine whether these issues were isolated or there were wider systemic problems.

In its list of key findings the report states that it "did not find any evidence of systemic issues with programmes examined from the Cabinet Office or the Big Lottery Fund". Other grants alongside those in question that have now been investigated were found to have been assessed, awarded and monitored in line with procedures.

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