Agenda item

To receive a report from the Director of Place on Strategic Grant Review.

Cabinet had before it a report * from the Director of Place.

The Cabinet Member for Community and Leisure outlined the contents of the report with particular reference to the following:

·         The purpose of today’s report is to approve the funding decisions recommended by the Community PDG to be awarded to organisations as part of the Council’s strategic grants programme.  Secondly, to agree a recommended funding period of two years.

·         This Cabinet requested for 2024/25 that, in light of the financial pressures on the Council, the total Strategic Grants budget is capped at £120,000.  The Community PDG met on 28 November 2023 to review the grants with current recipients attending the meeting to give presentations on their services, how the funding is used and the potential implications of any reductions in grant funding on their service delivery.  Written submissions and accounts were also provided to that committee.

·         That despite the significant budget challenges as a Council, this Cabinet and the Community PDG have both expressed their steadfast dedication to keep awarding these discretionary grants. We have no obligation to award these grants. In these very difficult times as we seek to balance our future budget, the choice to continue to award them is a statement of how highly we value these organisations and the benefit they bring to our communities.

·         As part of the review, Members considered:

a) The criteria for the prioritisation of the agencies that should be funded;

b) The level of funding for each agency, taking into account the proposed budget by Cabinet and the impact of any proposed reductions on the organisation and on vulnerable residents that access support through that organisation.

c) The term of the funding period, taking into account the Council’s budgetary position and the need to provide certainty to strategic partners for the purposes of financial planning.

Consistent with previous reviews, Community PDG Members prioritised funding decisions against categories of eligible potential strategic partners, where group 1 was the highest priority, group 2 the next highest, group 3 the least:

Group 1: defined as providing essential services to residents that represent a strong strategic alignment with the Council’s objectives

Group 2: defined as providing important services to residents that represent some strategic alignment with the Council’s objectives

Group 3: recognised as providing valued but non-essential services to residents that represent a weak alignment with the Council’s objectives.

The Community PDG determined the following recommendations:

·         To assist with financial forecasting and planning for funding recipients, that the strategic grant offers are made for a two-year period (April 2024 to March 2026).

·         To ensure a balanced budget, organisations in group 1 to receive a 90% funding allocation compared to current award (10% reduction) and organisations in group 2 to receive an 85% funding allocation compared to current award (15% reduction). None of the organisations were classed as group 3.

·         The Community PDG also recommended that the next review to take place in 2025/26 be added to their forward plan.

·         It is essential to acknowledge that we are not alone in facing budgetary constraints, rising costs, and inflationary pressures. We would all prefer to allocate more grants from a larger funding pool. However, our current circumstances require us to address a reduction in funding. This is not the ideal scenario, but it provides an opportunity to recognise and celebrate the invaluable contributions of these organisations to our communities.

·         That recognition is why Mid Devon has awarded strategic grants since 2004/2005 to voluntary and community organisations that provide key services to Mid Devon residents and visitors.  The last strategic grant review was undertaken in 2020/2021 with grant awards offered from April 2021 for a period of 3 years (ending March 2024).

·         The Strategic Grants are revenue grants. The purpose is to support the organisations’ running costs such as Director/Chief Officer salaries, rent and other running costs with the intention of allowing those organisations to apply for capital funding for growth, of which capital schemes tend to be more available than revenue schemes such as this one.

·         When considering grant decisions, we should highlight that despite the ongoing financial pressures for some years now, Mid Devon has continued to offer strategic grants to the same level since 2017.  We should be proud of this.  As we should be of our commitment to keep supporting them with a fund of £120k despite the even greater pressures we face today, and in the years ahead.

The Council have reviewed our records and can see that, since at least 2011, the Grand Western Canal’s grant was paid from the Council’s Strategic Grants budget and not via a separate contribution.  The Canal’s contribution was reviewed (along with the other grant awards) as part of the grants review at that time.  All of the grant offer letters that we have on file for the Canal refer to the grant being approved as part of a Strategic Grants Review.

·         All grants from the 2020 financial year onwards have been paid from one grants budget (although New Homes Bonus has continued to support that budget).

·         There has been consideration of whether the Canal could be moved from group 2 (important services) to group 1 (essential services).  When we talk about the terms important and essential this is how these groups are aligned to our Corporate Plan, and our core objectives of Homes, Environment, Economy, and Community.

·         A new Corporate Plan will be created this year, and this provides the opportunity for this Council to set out new objectives and priorities in advance of the next Strategic Grants review.

In conclusion, this report underscores the importance of our continued support for voluntary and community organisations in Mid Devon through our discretionary Strategic Grants funding. While we face budgetary challenges, our commitment to these organisations remains steadfast, emphasising the vital role they play in our communities.

The Leader of the Council highlighted the difficulty for charity’s, groups and organisation to take a cut in funding. Every year Central Government reduces the amount of funding year on year. The Grand Western Canal is a vital service to Mid Devon District Council and still receives a third of the total grant fund which shows how important is it to Mid Devon District Council.

The Cabinet Member for Planning and Economic Regeneration commended the work undertaken by all the voluntary groups, community groups, committees, supporters and volunteers. He continued to highlight the following:

Any reduction in funding from Mid Devon is regretted but with an effective halving of Government Grant funding to Mid Devon in the last 10-years, plus per annum capping Council Tax increases to 3%, plus rapid inflation that has exceeded 10% in the last year, does put us and all other Council’s into an impossible position.  Given these conditions Mid Devon has done well to maintain the Canal grant at 85% together with a pledge to maintain with no further reduction in the next 2 financial years.  Suffolk have just announced 100% deletion of their entire budget to Arts & Culture and with immediate effect in April. The financial position of Somerset Council facing bankruptcy through funding starvation and Government policy has been covered widely in the press.  

Last May, this Administration, made a commitment to fiscal responsibility.  The 15% reduction in grant could have been much higher.  Through my own life-long commitment to voluntary organisations, and the worthwhile work undertaken, I know the adverse impact any larger grant reduction would have made.  Indeed, much of my professional career was dedicated in working with the voluntary sector and helping raise funds.  Given the pressure on public finances, this 15% reduction, maintained at this level until 2025/26, was providing a clear positional ‘green light’ indication that local organisations needed to seek alternative funding.  Until there is a change in Central Government policy this approach is the direction of travel for discretionary non grant funding. The Canal have faced in the recent past the situation that Suffolk arts and culture group face a total loss of funding.

November 2012 Councillor Slade produced a report titled ‘Grant payments to external organisation 2016/17’. The report states “Grand Western Canal a Devon County Council facility which the District Council makes a contribution towards, given the challenges faced by the District Council in 2015 to meet the legal obligation of setting a balance budget it is recommended MDDC investment in the Canal is removed by 2017/18. 

The Cabinet Member for Planning and Economic Regeneration would encourage the organisations linked to Great Western Canal to have a strategic and co-ordinated fundraising strategy.

Discussion took place regarding:

·         The disappointment with the reduction to the Grand Western Canal.

·         Seeking engagement with Parishes around the Canal to raise their precept to cover the shortfall.

·         Since the grants have been reviewed by Community Policy Development Group, the Council was now subject to the Biodiversity Duty.

·         The others that had also received a reduction in the grant funding had they come forward?

·         The prioritised funding decisions against categories.

·         The organisations had time to make plans in the two year time frame.

RESOLVED that:

1.    That Cabinet sets a grant funding period of two years (2024/25 and 2025/26).

2.    That Cabinet approves recommended strategic grant funding awards for 2024/25 and 2025/26 as outlined in the report.

(Proposed by Cllr D Wulff and seconded by Cllr S Keable)

Reason for Decision:

The budget allocated for the combined grants during 2023/24 was £138,500. The funding available for 2024/25 was set at £120,000, of which any grant award to the Canal will be funded from New Homes Bonus and the rest from General Fund. This funding recommendation is £225 over the budget for 2024/25, which will need to be sourced from the General Fund.

Note * Report previously circulated.