Giving and receiving: Local government support for the voluntary sector in Wales May A joint report from:

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1 Giving and receiving: Local government support for the voluntary sector in Wales May 2004 A joint report from:

2 Giving and receiving This report has been produced by the Local Government Data Unit Wales, on behalf of the partnership that it has with: Welsh Assembly Government; Welsh Local Government Association; and Wales Council for Voluntary Action. Project board membership Brian Pickett Assistant Director, Local Government Data Unit Wales Steve Thomas Head of Policy, Welsh Local Government Association Bryan Collis Research Officer, Wales Council for Voluntary Action Wayne Williams Head of Local Government Financial Statistics, Welsh Assembly Government Project team membership From the Local Government Data Unit Wales: Brian Pickett; Sarah Jones and Gavin Jones. From the Wales Council for Voluntary Action: Bryan Collis and Jim Etty. Acknowledgements The success of any research project is primarily down to the co-operation with stakeholders. In this regard we are particularly grateful to Chief Executive Officers who provided the staff resource to complete the data collection form. Our thanks also go specifically to those officers who spent their time completing the data collection return. ISBN Published by: Local Government Data Unit Wales Columbus Walk, Cardiff, CF10 4BY Telephone Web site Local Government Data Unit Wales 2004 For any use of this material please write to the Local Government Data Unit Wales at the above address or enquiries@lgdu-wales.gov.uk First Published: May 2004 A WELSH LOCAL GOVERNMENT COMPANY REGISTERED OFFICE LOCAL GOVERNMENT HOUSE, DRAKE WALK, CARDIFF CF10 4LG LIMITED LIABILITY BY GUARANTEE. REGISTERED IN WALES NO

3 Local government support for the voluntary sector in Wales Contents Joint foreword 2 Setting the scene 3 Highlights from the research 4 The findings 5 Introduction 5 Methodology 5 Total funding by local authorities 7 Funding per head of population 7 Funding as a proportion of expenditure on services 8 Funding by service areas 8 Business rate relief 9 Other methods of support 10 Funding by other parts of the local government family 10 1

4 Giving and receiving Joint foreword The relationship between national and local government and the voluntary sector in Wales is innovative and years ahead of many countries in the developed world. The processes and agreements that are in place at the highest level cement and give credibility to this whole relationship. This report complements the good practice guide A Future Together?, published jointly between the Welsh Assembly Government, the Wales Council for Voluntary Action and the Welsh Local Government Association in June We are pleased with the results of this research. They show a significant rise in the level of financial support that local government has given the voluntary sector. This is an indication of the way that all sectors are working together to deliver good public services for the people of Wales. The voluntary sector has established an important role in some service areas. However, we must all ensure that the sector is funded to an appropriate level, particularly by grants for core costs, to allow the sector to develop and build its capacity. There is a long way to go, however. In every area there will be winners and losers, and the general increase in support will be little consolation for individual organisations that have not benefited from the overall trend. With local authorities providing community leadership, the whole of the voluntary sector has a significant role to play in developing and regenerating our communities. This is the first study since the inception of the Assembly and provides a benchmark against which future studies can be measured. This research should not be used to determine the correct level of funding by a top down approach. What is more important at both a local authority and regional level is ensuring that the voluntary sector is properly and appropriately engaged in the public services and modernisation agenda. We should concentrate on achieving the correct outcomes in contrast to arguing over the level of inputs. The information in this report will be valuable in evidence-based policymaking at a local level. It provides all the partners with a platform from which we can ask searching questions and to work together in an effective and appropriate way. We are pleased with the pivotal role that the Data Unit has played in this research. In the UK context, the Data Unit is a unique organisation funded jointly between local government and the Assembly. It provides us with solid evidence that is produced independently of any particular level of government. This sort of exercise is akin to one of the original reasons for setting up the Data Unit and a role that it can quickly grow into as it matures. Sue Essex Minister for Finance, Local Government and Public Services, Welsh Assembly Government Sir Harry Jones CBE Leader of the Welsh Local Government Association Lawrence Bailey Chairman of the Local Government Data Unit Wales Tom Jones Chair, Wales Council for Voluntary Action 2

5 Local government support for the voluntary sector in Wales Setting the scene This report provides information about the funding relationships between local authorities and the voluntary sector. In the publication A Future Together, the Welsh Local Government Association and the Wales Council for Voluntary Action noted how much progress has been made in the development of local governmentvoluntary sector relationships in recent years. This has included: The adoption of local compacts or agreements between the sectors, The establishment of local liaison committees; and Working together on the formation of Community Strategies. In parallel, voluntary organisations have been increasingly involved in the provision of public services, both in the traditional areas such as health and social care, but also in recycling and regeneration initiatives. This increased involvement has led to a need to monitor the way in which the voluntary sector and local authorities interact: to see whether the partnership agenda is working in practice; whether changes in the relationship are having any effects on the nature and size of voluntary sector funding and to see how funding varies across Wales. This will identify learning points and the effects external factors or internal policies have on funding. A number of indicators are suggested in A Future Together that concentrate on the processes involved in making the partnerships work at a local level. This report complements these by taking a broad look at funding of the voluntary sector by local authorities. organisations are highlighted at a national level through the Voluntary Sector Partnership Council and ministerial meetings as part of the Voluntary Sector Scheme of the Welsh Assembly Government. However, much of the funding to make these contributions is channelled through local authorities. Therefore, local authority practice in funding the voluntary sector is one of the key determinants in how effective the sector is in making a contribution to national priorities. In addition to the local agenda, the voluntary sector and local authorities are involved in national agendas where their contributions to meeting Welsh Assembly Government priorities are important. These contributions are made explicit for local authorities in policy agreements, which include targets for the encouragement and support for the voluntary sector. The contributions made by voluntary Many of these policy agendas have been greatly influenced by devolution. This is the first survey since the creation of the National Assembly, giving the opportunity to see how the changes have affected this source of funding for voluntary organisations. It is anticipated that the survey will continue at regular intervals to enable continued comparisons to be made. 3

6 Giving and receiving Highlights from the research The results of the study showed that the total given by way of grants or payments for services to the voluntary sector by local government in amounted to over 68 million. This is the equivalent of around 23 per head of population in Wales. A previous similar study published jointly by the Wales Council for Voluntary Action and the Welsh Local Government Association estimated total funding of around 29 million or 10 per head of population in The significant increase in funding over the intervening periods is indicative of the way that local and national government are working much closer with the voluntary sector in the delivery of policies and services. The results of the study showed on per head of population basis that the amount of funding awarded to the voluntary sector was much lower than the United Kingdom average, 10 compared to 25. The most recent data for the UK ( ), provided by the Home Office, show some improvement, with the Wales estimate of 12 compared to 26 for the UK. This study shows a dramatic increase in Wales to 23 spent per head of population. There is no reason to expect the UK average to have changed dramatically, indicating that Welsh local authority support for the voluntary sector is becoming closer in line with that seen in other parts of the UK. In addition to the overall amount that local authorities give the voluntary sector, we collected data that considered the funding awarded by individual service areas. This showed personal social services as being the area that funds the voluntary sector to the greatest extent. Of the overall total of 68 million, around 70 per cent or 49 million came from social services budgets. We also looked at the split between the level of grant funding and payments made to the sector in return for specific services. This showed that over half of the funding, 55 per cent was given as payments for specific services with the remainder being grant funding. Another form of tangible support that local authorities are able to give is relief from National Non Domestic Rates or business rates. The total amount relief given during was almost 25 million. For the first time, funding given by other members of the local government family in Wales was collected. This showed that police authorities funding was around 100 thousand with the national parks total being just over 400 thousand. Brought together the tangible funding given to the voluntary sector by local government in Wales in amounted to over 94 million. In addition to this, local authorities support the sector with gifts in kind such as subsidised or free accommodation. The full dataset relating to this research can be downloaded from the Local Government Data Unit Wales website at 4

7 Local government support for the voluntary sector in Wales The findings This section sets out in more detail the results of the research. It also explains the methodology used for the study. The following paragraphs put the results of the study into context. This paper does not advocate what the appropriate level of funding should be. Variations between authorities may be due to a number of factors including: the priorities for individual authorities; the various channels available for service delivery and the maturity of the voluntary sector in particular geographic and service areas. A number of case studies are included to illustrate the positive ways in which the voluntary and local government sectors are working together. Introduction Recently, there has been a shift in emphasis for local authorities to be enablers of service provision resulting in a growing role for the voluntary sector in the delivery of frontline services. The Local Government Act 2000 gave the power of Community Leadership to local authorities, which increased the need for close working between local authorities and the voluntary sector. One of the effects of the general drive for modernisation in local government through the Wales Programme for Improvement is an increased emphasis on working in equal partnership with other sectors, including the voluntary sector. At a national level the Voluntary Sector Partnership Council promotes joint working and co-operation between the Assembly and the voluntary sector. This is a body with influence to resolve issues of real importance. The improvement of relationships between local government and the voluntary sector is a recurring theme. Given the overall background, one missing piece of evidence was the robust, up-to-date information on the level of funding given by local government to the voluntary sector. Therefore, working closely with the Welsh Assembly Government the Assembly, the Welsh Local Government Association WLGA and the Wales Council for Voluntary Action WCVA, the Local Government Data Unit Wales the Data Unit conducted this study. Information on the level of funding in from local authorities to the voluntary sector was collected. The status of the organisations receiving funding was validated by WCVA. Methodology Through a designated point of contact within each authority we requested authorities to provide details of all funding given to the voluntary sector. The data was requested at service level within Authorities. To enable comparison across local authorities with different organisational structures, we determined the service level in line with the Best Value Accounting Code of Practice BVACoP as published by the Chartered Institute of Public Finance and Accountancy CIPFA. To ensure high quality information we collected details of the funding at a level that we could identify the actual organisation funded. Working with WCVA we ensured that the figures only included funding given to recognised voluntary organisations as defined in the Voluntary Sector Scheme of the Welsh Assembly Government: voluntary organisations, community groups, volunteers, self-help groups, community co-operatives and enterprises, religious organisations and other not for profit organisations of benefit to communities and people in Wales This dual approach, ensuring data accuracy but reporting according to local government service level, was agreed by the partners at the outset of the project. Returns were received from 20 unitary authorities, three national parks and four police authorities. Whilst a small number of authorities attached some caveats to the data submitted the general quality was of a good standard. Bridgend County Borough Council submitted data relating to rather than The data submitted was used to estimate the figures for for that authority. Denbighshire County Council submitted partial data. Based upon the data from an earlier study and some that was provided for and 5

8 Giving and receiving Figure 1: Total amount awarded to the voluntary sector Authority Amount awarded to the voluntary sector 000s Amount awarded as a percentage of gross revenue expenditure (c) Isle of Anglesey 1, Gwynedd 5, Conwy 2, Denbighshire (a) 1, Flintshire (b) 2, Wrexham 1, Powys 7, Ceredigion 1, Pembrokeshire 2, Carmarthenshire 2, Swansea 7, Neath Port Talbot 4, Bridgend (a) 3, The Vale of Glamorgan 2, Cardiff 4, Rhondda Cynon Taf 9, Merthyr Tydfil 1, Caerphilly 2, Blaenau Gwent 1, Torfaen Monmouthshire 1, Newport 1, Unitary authority total 68, Brecon Beacons Pembrokeshire Coast Snowdonia National parks authorities total Dyfed Powys Gwent North Wales South Wales Police authority total Wales total 68, (a) Estimated figures (b) Figures may exclude some voluntary organisations to which funding is given (c) Calculated using figures from the Welsh Local Government Financial Statistics 2003, table 2.3 6

9 Local government support for the voluntary sector in Wales , we estimated the level of funded awarded by Denbighshire. Prior to publication, officers from both Bridgend and Denbighshire agreed the estimates for their respective authorities. Case study 1: Monmouthshire Community Recycling Monmouthshire Community Recycling operates a weekly kerbside collection service for 14,000 households. Discussions between residents and Monmouthshire County Council started in 2001, and the scheme has been operating since June The Council provides a recycling credit and use of capital assets, plus support and advice. Other support comes from the Viridor Credits (Landfill Tax Credit scheme), Corus, Alupro and Alcan. A recent Cleanstream grant, from a scheme supported by the New Opportunities Fund and administered jointly by the Wales Council for Voluntary Action, the Welsh Local Government Association, the Environment Agency and Cylch the community recycling network, will enable a further 12,000 households to be included in the near future. Total funding by local authorities The research showed that between them, the 22 unitary authorities total direct funding of the voluntary sector amounted to over 68 million. In addition to this amount National Park and Police authority funding amounted to 414 thousand and 95 thousand respectively. Figure 1 shows the amount for each authority. More detailed data can be found on the Data Unit s website at Funding per head of population Whilst the funding figure of 68 million is significant in absolute terms it is worth considering the amounts given by individual authorities on a per head of population basis. Using the Registrar General s 2001 mid year estimates of population the average level of funding is per head of population. It should be noted that across the 22 unitary authorities there are significant differences. Figure 2 shows the results for each authority compared with the average for the 22 authorities. Figure 2: Funding per head of population Unitary authority average per head 70 s per head of population Isle of Anglesey Gwynedd Conwy Denbighshire (a) Flintshire (b) Wrexham Powys Ceredigion Pembrokeshire Carmarthenshire Swansea Neath Port Talbot Bridgend (a) The Vale of Glamorgan Cardiff Rhondda Cynon Taf Merthyr Tydfil Caerphilly Blaenau Gwent Torfaen Monmouthshire Newport (a) Estimated figures (b) Figures may exclude some voluntary organiations to which funding is given 7

10 Giving and receiving Figure 3: Total funding by service area Service area (a) Grant funding 000s Payments for services 000s (b) Total funding 000s Percentage of funding by payments for services Central services 4, , Court and probation services Culture and related services 4, , Environmental services Planning and development 3, , Education services 2,046 1,447 3, Highways, road & transport Housing services 2, , Social services 13,922 34,755 48, Total for all service areas 30,844 37,439 68, (a) Service areas determined in line with CIPFA s BVACoP (b) Four authorities did not identify any payments for services all voluntary sector funding had been classed as grants Taking account of figure 2, it is clear that three authorities are funding the voluntary sector on per head of population basis at a considerably higher rate than the remaining 19 authorities. Taking the three authorities out of the calculation then the average for the remaining 19 authorities would lie between 18 and 19 per head of population, with more authorities being closer to this figure. Funding as a proportion of expenditure on services It is envisaged that the voluntary sector will play a growing role in the delivery of services and the development of communities. Therefore it is relevant to explore the funding levels in comparison to the gross revenue expenditure of authorities. In on average unitary authorities spent a total of 3,800 million or 1,307 per head on service delivery. Therefore, whilst there has been a significant increase in the level of funding it is still less than two per cent of gross revenue expenditure of all local authorities. Looking at figures one and two together it can be seen that authorities that have a higher per capita spend on the voluntary sector also award the voluntary sector a higher proportion of their gross revenue expenditure. Case Study 2: Prosiect Anabledau Gwynedd This was a partnership project involving Gwynedd County Council and three voluntary sector providers of services for adults with learning difficulties: Menter Fachwen, Agoriad and Antur Waunfawr. The project enabled the provision of training for service users with accreditation through the Open College Network (provided by Menter Fachwen), NVQ and ASDAN. Overall sixty people with learning difficulties were enabled to move from local authority day services to community based placements, or worked in the community sector. A further 60 received accredited training awards. The project received European funding, with the Council providing around 40% match funding. Funding by service areas We conducted the research to produce data at individual service level. In addition, we recognised with the growing role that the voluntary sector has in service delivery it was important to capture the level of funding that was being given as payment for services. Figure 3 shows the level of funding across the various service areas broken down by grant funding and payments made for services. 8

11 Local government support for the voluntary sector in Wales Figure 4: Unitary authority funding of the voluntary sector by social service area 9% 2% Services for younger adults Services for children Services for older people 54% Other services 35% Figure 3 demonstrates that over half of the funding given to the voluntary sector is in return for the provision of services. Payments for services are likely to higher than that set out in figure 3, as four authorities did not identify any of their funding as being such payments. It is worth noting that if you isolate social services funding the proportional split between grant funding and payments for services becomes significantly different. Removal of social services from the total would show total funding of around 20 million of which only 14 per cent being payments for services. It is clear that in both absolute financial terms and the voluntary sectors capacity to deliver services, social services is a key area. In , just under 49 million funding came from social services budgets. This represents over 70 per cent of the total funding received by the voluntary sector from local authorities that year. Given the relative size of that service area, figure 4 demonstrates the split across the component areas of social services. Figure 2 shows the varying levels of funding across the 22 authorities. Much of this variation is due to differences within the social services area. Looking at the authorities that fund the most and least in this area: Powys reported that it spent just under 7 million from its social services budget whereas Torfaen reported a spend of around 40 thousand. Case Study 3: Hafal Hafal (Welsh for equal ) is a national voluntary organisation managed by people with severe mental illness and their families and employing 112 staff across Wales. Hafal has services in all 22 local authority areas and receives funding from the local authority itself in most. Hafal works closely with Social Services Departments which are the usual lead for commissioning: local authority-funded activities include day services, housing, employment, carers respite and advice. Hafal says We work with local authorities as partners to supply vital social care services for our clients. Close co-operation with local authority staff on planning and meeting individual clients needs is as important as the funding relationship. Hafal is very clear that we do not expect to be funded by local authorities just because we are voluntary sector but rather because we have something special to offer as a client-led organisation which can provide a high quality and cost-effective service 9

12 Giving and receiving Business rate relief Throughout England and Wales business rates or national non-domestic rates can be considered as a national rating system. This is despite its administration and collection being undertaken by local authorities. In Wales the 22 unitary authorities administer business rates. The total collected across the authorities is pooled and re-distributed on a population basis. In the total collected by local authorities was in the region of 600 million. Certain organisations, including the majority of those within the voluntary sector are able to claim relief from payment of business rates. Relief is given in two ways; mandatory or discretionary. If an organisation satisfies certain criteria then a local authority are obliged to award it mandatory relief at rate of 80 per cent from the payment of its business rates. This 80 per cent relief is deducted from the amount that that particular authority has to pay into the all Wales pool. Therefore, if an authority awards mandatory relief then there is a resultant proportionate loss across all 22 authorities as there will be less money going in to the overall pool. Authorities reported as a part of this research that the total level of mandatory relief awarded to the voluntary sector as being in region of 21 million. Across the 22 authorities there are significant variations in the amount of mandatory relief, for example, around a third of total amount of mandatory relief was awarded by Cardiff, representative that a number of voluntary organisations have head office buildings within the capital. However, the variation across authorities is not relevant as this total of 21 million is deducted from the overall pool. In addition to the mandatory relief authorities can decide to award discretionary relief at a rate of 20 per cent of an organisation s liability for business rates. Therefore, if an organisation is entitled to mandatory relief and is also awarded discretionary relief then they will have no liability for business rates. The key difference for an authority is that if it chooses to award discretionary relief 25 per cent of the cost of this is borne by that authority. In million discretionary rate relief was awarded to over 3,500 voluntary organisations. Powys County Council awarded over half of this, where the rate relief awarded amounted to 16 per cent of the total potential business rates collected. The lowest overall relief reported was less than one per cent by Blaenau Gwent. In total, therefore, business rate relief awarded to the voluntary sector was in the region of 25 million. Whilst compared to the overall level of business rates collected this is not a significant proportion, in terms of tangible funding to the voluntary sector then this represents over a quarter of all support. Case study 4: Swansea Council for Voluntary Service There has been a council for voluntary services in Swansea for nearly 40 years. The City and County of Swansea provides a grant of approximately 50,000 which funds about a quarter of the core costs of SCVS; other funding coming from the Assembly and the Local Health Board. Core funding enables SCVS to provide a base line of services to the sector (information, advice, development support and volunteering support). It also enables SCVS to take advantage of other funding (circa 1.4 million in ) to provide a range of projects funded by a variety of charitable trust funds, public bodies, the Welsh Assembly Government and the local authority. Core funding by local government is a financial investment, which supports citizenship, civil society and services to the community of the City & County and clearly delivers these to a funding, quantity and quality level far in excess of the outlay of the Authority. Other methods of support In addition to the tangible financial assistance, local authorities support the voluntary sector in numerous other ways. This support is commonly known as support in kind. Often because there is not an actual payment, this support can sometimes be overlooked. We did not attempt through the research, to capture all examples of support in kind. Instead we 10

13 Local government support for the voluntary sector in Wales asked authorities to provide us with details of significant examples of support in kind. A large number of authorities reported that they provide assistance by way of support in kind. Figure 5 gives a general flavour of the sorts of support in kind that authorities give to the voluntary sector. Figure 5: Examples of support in kind given to the voluntary sector Free or subsidised office accommodation Office and general support services Sports development activities including free use of sports grounds and related facilities Provision of the administrator for the Police and Community Trust Access to free courses including ICT related courses Free use of authorities transport fleet Assistance with funding applications Insurance and communications equipment for search and rescue teams. Given the wide and varying examples of support in kind we did not ask authorities to assign a value to the support in kind. Assigning a value can lead to comparisons that are not done on a like for like basis which could then in turn undermine the quality of the complete dataset. Figure 6 shows one response as an example. It is clear that Pembrokeshire Coast National Park Authority closely aligns its core purpose with the support it gives the voluntary sector. Figure 6: The practical assistance that Pembrokeshire Coast gives the voluntary sector A core purpose of the National Park Authority is to promote recreation, understanding and conservation of the special qualities of the Park. Park Rangers regularly work with 20/ 30 voluntary organisations throughout the year, and we have a team of volunteers that undertake circa 100 work sessions per year. We support community groups and other groups, such as Keep Wales Tidy, with staff expertise encompassing design work, project management, practical project support and passing on of local knowledge. We often arrange free walks and talks to voluntary organisations, provide secretariat support, produce leaflets/publicity material and assist with sourcing grant aid for projects. We make available, as part of this support, our plant, equipment and materials. Our support to voluntary organisations is directly linked to our core purposes, and the provision of this support helps us deliver our services in partnership with the local communities and other interested organisations. Source: Data collection return from Pembrokeshire Coast National Park Authority 11

14 Giving and receiving Funding by other parts of the local government family In addition to the 22 unitary authorities, there are other parts of the local government family in Wales: fire, police and national park authorities. Fire authorities reported that they did not fund the voluntary sector to any significant level. However, we did receive returns from the four police and three national park authorities. Figure 7 shows the total funding by the national park authorities to be around 400 thousand. Figure 7: Funding by national park authorities National park authority Amount 000s Brecon Beacons 82 Pembrokeshire coast 60 Snowdonia 272 National park authorities total 414 Figure 8 shows the funding that police authorities gave the voluntary sector in , together with a flavour of funding sources. Whilst the level of funding given by both national parks and police authorities is relatively small in comparison to that given by the unitary authorities, the support is still very important to the voluntary sector, allowing vital community and environmental schemes to continue. Figure 8: Funding by police authorities Police authority Police property act 000s Community safety initiatives 000s Other funding 000s Total 000s Dyfed Powys Gwent North Wales South Wales Police authority total