Local authorities in the UK make around £600m in grant funding to civil society organisations each year, according to new research.
The Directory of Social Change (DSC) found that funding for the sector from this source has increased in recent years, with grants averaging at £12,000 each.
It found that 75-80% of grants were awarded through open or competitive processes and no councils reported that their grant making had led to legal proceedings.
DSC sent freedom of information (FOI) requests to all UK councils last year, asking how much grant funding they had given to voluntary, community and social enterprise (VCSE) organisations in the previous three years.
More than 200 councils responded to show that they had collectively given £245m in 2018-19, £301m in 2019-20 and £333m in 2020-21 to VCSEs.
DSC estimated that the overall figure for all 397 authorities in the UK would be around £600m a year and urged greater transparency on grant making practices.
‘We need clearer and better data’
Jay Kennedy, DSC’s director of policy and research said funding for the VCSE sector had “remained stubbornly murky” despite recent policy initiatives such as the local government transparency code.
“We need clearer and better data about government spending on the VCSE sector, especially for local government spending, which this research helps to redress,” he said.
“We hope this report and its recommendations will be read by commissioners and anyone in local government who works with local charities, voluntary organisations and social enterprises.
“It also provides evidence that organisations can use in their discussions with local government officials about commissioning.
“It’s completely legitimate for local government to make grants to local charities, and this can be done in a transparent, proportionate and accountable way, which gets the best outcomes for all concerned.”
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