The Office of the Third Sector (OTS) has revealed the baseline for reporting on progress to make three year funding the norm. Kevin Brennan, Minister for the Third Sector, announced that across government departments, the mean average for the proportion of direct grants that are for three years or more is 65.7%.This figure will now by used as a baseline for the OTS to report annually on progress on increasing the proportion of government grants that are for three years or more
As part of its commitment to the Compact between Government and the third sector, the Office of the Third Sector (OTS) has been working with departments and others in the public sector to move to longer term funding arrangements with third sector organisations.
In the 2006 Pre-Budget Report, the then Chancellor Gordon Brown announced that when government departments received their spending settlements for 2008/09 to 2010/11, they would be expected to pass on the certainty of three year funding to the third sector organisations they fund as the norm rather than the exception.
A baseline will also be set in 2009 for performance on contracts and performance by non-departmental public bodies and agencies. The OTS will also work with local government to establish a baseline for local authorities in 2009.
Longer term funding agreements can help third sector organisations to:
- be more sustainable – to engage in longer-term planning, borrowing and investment
- be more innovative – with more time to develop and demonstrate the impact of new services and activities
- provide better value for money – reducing time spent on year-on-year fundraising, freeing up staff to concentrate on delivering long-term outcomes.
While the Government are keen to ensure three year funding is the norm, there are instances where shorter-term funding may be more appropriate, for instance if a department is funding one off events or for very specific pilot projects.