Policy, Government and the Voluntary Sector

New research reveals £600m in local authority grants to VCSE orgs

New DSC research has provided the clearest picture to date of the level of local authority grant-making to the Voluntary, Community and Social Enterprise (VCSE) sector in the UK.

Research published today by the Directory of Social Change (DSC) calculates that local governments across the UK contribute around £600m in grant funding to Voluntary, Community and Social Enterprise (VCSE) organisations. 

DSC submitted Freedom of Information (FOI) requests to all UK councils last year asking for data about their grants to VCSE organisations for the previous three financial years. The results show they collectively award in the region of £600 million in grant funding to the VCSE sector annually.  

Other findings show that the trend of grant-making across the UK increased between 2018/19 and 2020/21 both in terms of the total value and the number of grants made. However, half of councils awarded less than £340,000 each year and the average individual grant is just £12,000. 

The research also provides striking evidence that legal concerns about councils using grants as opposed to contracts to support VCSE organisations are unfounded.  Out of several hundred respondents to the FOIs, just two local authorities reported that they had received formal complaints regarding their grant-making, and zero respondents reported legal proceedings arising from councils’ grant-making processes or decisions.  

The Directory of Social Change (DSC), which conducted the research, also coordinates the Grants for Good Campaign, which aims to support and increase the use of public sector grants for the Voluntary, Community and Social Enterprise (VCSE) in commissioning and more generally.   

DSC Director of Policy and Research Jay Kennedy said: ‘this new research highlights an area of funding for the VCSE sector that has remained stubbornly murky despite the emergence of open data and policy initiatives like 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 concluded, ‘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.’ 

Read the full report here.