1
Consultation on publishing voluntary
and community sector spending data
Analysis of responses, April 2013
2
Contents
1. Introduction ............................................................................................. 3
2. Summary consultation responses ......................................................... 5
3. Responses by question .......................................................................... 7
3.1 Publishing VCS spending data ........................................................... 7
3.2 Defining the VCS sector ...................................................................... 9
3.3 Type of spend ................................................................................... 12
3.4 General comments ........................................................................... 14
3.5 Additional respondent statements ..................................................... 15
Appendix – list of respondents ................................................................... 17
3
1. Introduction
Central government has made the transparency of data a key priority, on the
basis that data allows citizens to hold government to account, drives
improvements in public services by informing choice, and stimulates
innovation and growth. The publishing of grants to the voluntary, community
and social enterprise sector forms one of the transparency principles set out
by the Department for Communities and Local Government (DCLG) as
published in a Recommended Code of Practice on Transparency for Local
Government (the Code)1 .
The Code recommends that authorities should clearly itemise and list:
“copies of contracts and tenders to businesses and to the voluntary,
community and social enterprise sector
grants to the voluntary, community and social enterprise sector.”
The Local Government Association (LGA) is supporting local authorities
understand how to publish information related to transparency, and has
previously published practitioners’ guidance on publishing spending data,
contracts and tenders and senior salaries2. In line with this previous guidance,
the Local Government Association (LGA) wants to support local authorities in
understanding how best to publish voluntary, community and social enterprise
sector (VCS) spending where possible, in a way that is:
consistent and comparable between authorities, thus promoting local
accountability and
useful, to demonstrate to residents and the VCS how local councils
spend their money.
The LGA has consulted with stakeholders to seek views on extending existing
guidance to include the publishing of voluntary, community and social
enterprise sector (VCS) spending and grants where possible3. The
consultation questions focussed on how to:
define a common definition of the sector that will capture relevant
organisations in receipt of funding
1 DCLG 2011: Code of practice for local government on transparency
http://www.communities.gov.uk/localgovernment/transparency/ 2 LGA practitioners’ guides to publishing data: http://www.local.gov.uk/practitioners-guides-to-
publishing-data 3 LGA consultation on publishing voluntary and community sector spending data:
http://www.local.gov.uk/vcs-spending
4
best capture different types of spending, recognising that while grant
funding is simplest, VCS funding is moving in many cases towards
contractual and other arrangements
develop a practical solution to publishing the data that is cost-effective
and does not create a new and unnecessary burden on councils.
The consultation was open to local authorities, VCS organisations and other
interested parties for eight weeks between 19 October and 14 December
2012.
A total of 16 responses were received – seven from councils, eight from VCS
organisations (including VCS infrastructure organisations) and one other
response. The full list of respondents can be found in Appendix – list of
respondents.
The responses to that consultation are summarised in this report.
5
2. Summary consultation responses
The consultation drew a range of widely differing views on the publication of
VCS spending data. All respondents agreed with the principles of
transparency, but the means by which councils arrive at transparency was a
subject of diverging positions.
There were instances where councils were already publishing VCS spending
data in a way that suits their local needs and it was questioned whether the
proposed transactional level data would be of sufficient use or interest to
warrant the increased burden on councils.
Responses from some of the VSC organisations indicated that the data and
information most useful to them would involve a greater insight into the
decision making processes and rationale behind spending.
It is clear from the consultation responses from councils that any additional
requirements for classifying and publishing data is regarded as an additional
burden and would stretch their limited resources.
Any LGA guidance on the publication of VCS spending data will need to
reflect that councils are at different points in terms of open data, the
management of data and have different views on what transparency means to
them. The responses to this consultation suggested that guidance should help
councils understand how to publish data using examples of good practice. It is
important however that this guidance is regarded as optional and does not
create any mandatory new burdens.
In summary, the responses to the consultation suggested it would be helpful
to:
1. Update the existing spending guidance to include information on VCS
spending, but to offer this as optional for those councils that publish
VCS spending and grant data
2. Promote good practice on transparency as a means to better inform
and engage proactively with the local VCS
3. Emphasise examples of good practice in publishing spending and grant
data, and including policies, practices and information about overall
local spending to put the information into context
4. Broadly adopt the existing government definition of VCS as part of the
updated spending guidance, but for government to
o Consider further guidance which organisations should be included
6
and excluded
o Review the definition of social enterprise organisations and how
they can be best identified.
7
3. Responses by question
3.1 Publishing VCS spending data
The questions sought views on how best to publish spending and grants to
the VCS.
1. Should spending on the VCS be linked to the spending guide (Local transparency: a practitioner’s guide to publishing local spending data) and follow the modified spending template? Or else what are other ways to publish comparable VCS spending data?
Responses to this question were mixed. Three of the seven councils that
responded were in favour in principle of linking VCS grants to spending
guidance, but some felt that the detail of publishing VCS spending would be
an excessive burden and an additional cost, particularly if councils were
expected to classify and publish payments from previous financial years.
One council already published VCS spending data, but to do this carried out
an annual process of gathering details of payments to the VCS from
departments. Consequently, the council stressed that publishing alongside
spending over £500 would not be their preferred option due to the additional
cost burden.
All respondents from the VCS indicated that they believe the publishing of
VCS spending should be linked to the spending guide and the main dataset of
spending.
One VCS organisation suggested a number of additional columns in the
spending guide’s template. These were organisation type (i.e. registered
charity, social enterprise, community group, SME) charity or company number
if applicable, turnover of organisation receiving funds and classification of type
of spend (i.e. grant or contract).
One VCS organisation indicated that they believe publishing VCS spend
should be a mandatory requirement.
2. Are councils able to tag existing spending data as VCS spend? What
are the best ways to identify spending on the VCS? (This question is
primarily aimed at local authorities.)
Most authorities indicated a burden tagging spending of VCS organisations
and highlighted risks including human error, significant costs associated with
the exercise including training and potential delays with paying suppliers.
Councils indicated that, if introduced, tagging suppliers would not be
8
immediate and retrospective tagging would be a particular problem as the
information is currently not included in many finance systems.
One council indicated that they already tagged spending to the VCS. Another
had done this previously with the support of a consultant, albeit at a cost. A
number of councils are looking at spend analysis tools, but these are said to
carry considerable costs (a cost of over £9000 for a simple annual update and
significantly more for on-going monthly monitoring was mentioned).
3. How feasible would it be for councils to identify spending to SMEs?
Would this be desirable?
There is some agreement among respondents from both sectors that it would
be desirable to identify funding to SMEs. While some councils report that it
may be possible, all councils stress that this would be a highly expensive and
difficult task involving reviewing records from thousands of suppliers without
guaranteeing that SMEs could be accurately identified. Taking this burden into
account there is very little support for identifying SME spending.
4. Are there any other types of sector that should be tagged such as
private and public sector?
While VCS organisations saw the value in detailed tagging of all types of
organisation to aid the understanding of where council money goes, the
response was more mixed among councils:
one council already identified spending to the public and private sectors
two others saw some benefit (with one suggesting the addition of faith
groups)
the remaining did not indicate any benefits that would outweigh the
costs.
Conclusions about publishing spending data
The spending guidance should be amended to include information on
publishing VCS spending, but offered as optional good practice
guidance reflecting the range of possible approaches
Tagging of VCS spending should be regarded as good practice, but
remain aspirational and not apply retrospectively to existing spending
Additional tagging of spending to other sectors such as SMEs should
not form a key part of revised LGA guidance
9
3.2 Defining the VCS sector
The responses reflect views on the suitability of the government definition to
be adopted on a voluntary basis. The definition is based on that used by the
government and is supplemented by information from discussions with
councils, consultants and the VCS (see consultation document for further
details)4.
5. Is the above definition adequate to determine organisations within
the VCS? Is the definition inclusive enough to capture sufficiently the
full scale of each council’s spending to the VCS, or conversely, too
broad in that it captures spending to organisations that should not be
categorised as VCS?
The government definition of VCS was seen as useful by respondents. Some
councils supported the definition outright, but others found specific inclusions
(provided as additional guidance to the government definition) too broad,
containing organisations that they would not themselves include.
Responses from the VCS were all supportive of the definition in general, but
some suggested that it would be too broad or incorrect if some of the specific
organisations were included or excluded (see the responses to Q7 for more
detail). One VCS organisation indicated that a distinction be made on the
basis of size of the organisation.
Michael O’Toole, the Crown Representative for Voluntary, Community and
Social Enterprise Sector, indicated that the definition may lead to an
incomplete capture of social enterprises. He suggested that
o social enterprises could “self-certify” against an agreed definition.
o cross-referencing to existing ‘registers’ of social enterprises which may
be accessed through dialogue with sector membership organisations
o the creation of a central repository of all VCSEs each with a unique
identifier would aid all areas in identifying spend, grants, loans and
potential fraud
6. Should the definition only include organisations that are either
registered with the Companies House (non-profit making), Charity
Commission or the Community Interest Company (CIC) regulator?
4 LGA consultation on publishing voluntary and community sector spending data:
http://www.local.gov.uk/vcs-spending
10
And should councils record the Companies House, charity or CIC
number?
There was almost unanimous agreement among both council and VCS
organisations that relying solely on Companies House, Charity Commission or
Community Interest Company numbers would not capture a sufficient number
of VCS organisations.
The VCS welcomed reference to the relevant organisation number as
additional information.
7. Are there any organisation types that should not be included in our
proposed definition or in the VCS list?
Respondents from both councils and VCS organisations made suggestions for
organisations that should not be included in the definition of the VCS. These
included:
housing associations
former parts of the public sector that are now run separately
independent schools (fee paying, private)
members of the Clubs and Institutes Union (CIU)
research institutes
NHS trust funds
ad hoc steering groups (that do not have substantial VCS
membership)
partnerships and hybrid bodies, with independent status
where organisations are defined legally as charities but would be
understood by the general public as a statutory or religious
provision
organisations of social benefit, often registered as companies
limited by guarantee, but which choose not to register as charities
8. Specifically, social enterprises are included in the Code and therefore
in the above definition. Is it useful / practical to include social
enterprises? Can these be identified by councils?
Some councils believed that the inclusion of social enterprises within the
definition of the VCS would be useful, but is currently problematic. Practical
difficulties in identifying them include
a lack of definition of the sector, for example large companies creating
social enterprises and the difficulty in accommodating them
administrative costs associated with creating additional cost codes, and
11
lack of local intelligence on social enterprises.
There was strong support among VCS organisations that social enterprises
should be included, although recognising them and distinguishing between
different types of social enterprise was seen as an issue. For example former
parts of the public sector that have been ‘hived-off’, may define themselves as
social enterprises, but could distort the overall VCS spending figures because
of their large size.
Additional comments were made by Michael O’Toole and are listed under Q5.
9. Are councils able to identify VCS organisations when publishing
spending data? What process do you use to identify VCS
organisations? (This question is primarily aimed at local authorities.)
Councils stated that the identification of VCS organisations in spending data
carries a substantial burden. Responses to this question from councils were
similar to those for Q2.
However some of the responses from the VCS sector are worth noting. Three
of the four VCS responses indicated that councils should work with local VCS
infrastructure organisations to assist with identifying VCS organisations. The
other suggested that recipient organisations should provide evidence of legal
structures upon applying for funding or responding to tenders – they should
then be categorised on that basis.
Conclusions about defining VCS:
The government VCS definition should be used as a basis for the guidance, but more work on identifying specific organisations is needed
Central government should review the inclusion and exclusion of organisations, incorporating comments from this consultation and whether such a detailed list is helpful – local policy decisions may determine what organisations should be categorised as VCS
Reference only to the Companies House, Charity Commission or community interest company registers is not sufficient; but unique identifiers to existing registers should be referenced when publishing spending where possible
A more comprehensive definition of social enterprises needs to be developed if they are to be included in VCS spending
12
3.3 Type of spend
The LGA sought views on whether to include various types of spending in an amended spending guidance to take account of VCS grants.
10. Do you agree with our proposal to include an additional column in
the spending template to differentiate spending as a strategic grant, a
grant with formal agreement or a legally binding contractual
arrangement? Is this distinction between different funding
arrangements practical to implement?Do you agree with our proposal
to include an additional column in the spending template to
differentiate spending as a strategic grant, a grant with formal
agreement or a legally binding contractual arrangement?
There was a mixed response from councils to differentiate between various
forms of grants and contracts. Responses ranged from support in principle but
modification or clarification of the categories – to opposition on the basis that it
would be a burden with little perceived benefit. Some councils said that it
would be possible to identify types of spend along these lines, but that clear
definitions for each category would be required in order to avoid coding error.
VCS organisations were supportive of the principle of providing information on
the type of spend, however some disagreed with the specific categories
suggested in the consultation document. Suggestions included for example:
using the three categories as described in the consultation document
referring to only ‘grants’ and ‘contractual arrangements’
referring to only ‘grants’ and ‘commissioned services’ as the legal
profession was said to understand grants as legally binding contractual
arrangements.
Two VCS organisations stressed that classification of type of spend should be
mandatory as opposed to desirable.
11. Are there any additional categories in terms of type of spend that
should be included?
Most organisations indicated that there should be no additional types of spend
included. Some council responses suggested including the following
organisations in the spending publication:
local organisations
faith organisations
sole traders
VSMEs
13
VCS responses were:
spend that arises as a result of the personalisation agenda (personal
budgets)
spending through sub-contracting Are there any additional
categories in terms of type of spend that should be included?
12. What other useful information about VCS spending should be
published, if any?
One council indicated that they currently also publish further descriptive
information about the service, the department responsible, duration and
council priority or strategy underpinning the payment.
One VCS organisation suggested that information should be included to flag
where payments were made to groups targeting protected characteristics
under the Equality Act 2010. Other suggestions included the period of grants,
whether it is capital or revenue spend, and contextual information about
thespend, including links to explanations and information around changes to
funding.
13. Do you agree that benefits in kind should not be published? If so,
would you agree that publishing benefits in kind to the VCS
separately in a descriptive format would be most useful? Or else
what other ways, if any, do you propose that benefits in kind should
be published?
There was some agreement across council and VCS respondents that
information about benefits in kind would be useful, but that it cannot
reasonably be expected to be published in the same way as other spend.
Conclusions about type of spending:
Clarification should be sought on legal definitions of grants, contracts
etc. and, based on the outcome of that, categorisation of grants,
contracts etc. should be included as good practice in the guidance
Contextual information about council’s policies, strategic priorities and
nature of grants should be published alongside VCS grant data
Benefits in kind cannot be published in the same way as other spend
14
3.4 General comments
14. Do you have any further comments or suggestions concerning the
publishing of VCS spending data?
One council stressed that it believed the monthly transactional spending
approach to publishing VCS spending offers “little real value added”. They
reported that the current regime of publishing spending over £500 had
generated very few queries and little feedback.
Another council, while very supportive of the principle of publishing VCS
spending data, was concerned about the quality of the data being published,
that could potentially do “more harm than good”. They felt that in the longer
term transparency and consequent public scrutiny would lead to higher quality
data, but in the mean time they suggest a “period of peer review to ensure the
quality of data is sufficient before wider dissemination”.
There were also suggestions that there should be standardised VCS
classification in local and central government and that LGA guidance should
be published in conjunction with DCLG and other relevant boards.
15. Do you have any further comments or suggestions concerning
publishing spending data in general and in particular about the
spending data template in the Appendix?
Several responses to this question were received.
Individual councils were concerned that
the current system of publishing VCS spending in a separate sheet was
preferable and that changing this would require system change and
reclassification
commercial sensitivity and the need to redact personal information under
the Data Protection Act would place an additional strain and burden on
local authorities
an onerous publishing scheme with additional data required would divert
“precious staffing resources” from delivery of services, and that it was
unclear about the genuine demand for such “monthly, transactional data”
Individual VCS organisations suggested:
to include a “refined definition of ‘culture’ within the local authority
spending template” and would work with the LGA to achieve that
15
that while the data could be useful strategically “it presents a veneer of
transparency without the substance”
making row 21 of the spending template (type of spend) and row 18
(supplier ID) mandatory, as opposed to desirable
3.5 Additional respondent statements
A small number of respondents volunteered additional statements that did not
fall into the main consultation questions. These are summarised below and,
where appropriate, links to more information is provided.
Individual councils stated that
scarce resources could make publishing VCS as the consultation
document suggests difficult and that the system must be as simple as
possible to operate – a user friendly database, including SME status
would be welcomed
instead of a transactional level approach, a council referred to an on-
going dialogue between councils and the local VCS sector. An annual
statement could be produced on the basis of local priority and collected
by central government or the LGA
Individual VCS organisations stated that publishing data alone would not
necessarily bring transparency. This would involve linking data with decision
making and rationale behind spending, ensuring wide input in decisions,
informing respondents to consultations of how their input was used, clearly
communicating decisions and working with local organisations to benefit the
local area.
A VCS organisation welcomed the consultation and its intention to culminate
in guidance for publishing VCS spending data that is consistent and
comparable, but also emphasised its belief that the data should assist local
authorities in better engaging with the VCS and that for this there needed to
be behaviour change.
One of the VCS organisations – Compact Voice - provided details of an FOI
exercise seeking information around funding to and engagement with the
VCS5. They emphasised that for published data to be useful for them it should
allow them to find the following:
total spend on VCS through all local authority grants programmes
5 Further information about the FOI spending enquiry is available on
www.compactvoice.org.uk/foi2012
16
total anticipated number of grants
total annual grant budget, including all local authorities
total spend allocated to direct and indirect contracts with VCS
total anticipated annual number of direct and indirect contracts issued
to VCS organisations
total annual contract budget, including all local authority contract
programmes
total anticipated annual budget allocation, including local revenue,
business rates and grant allocation provided by central government
17
Appendix – list of respondents
Local government
Wiltshire Council
Leicestershire County Council
Leeds City Council
London Borough of Bexley
North Yorkshire County Council
Thanet District Council
Devon County Council
Voluntary and community sector
The Lesbian and Gay Foundation
Arts Council England
NAVCA (National Association for Voluntary and Community Action)
Involve Yorkshire & Humber
NCVO (National Council for Voluntary Organisations)
Community Matters
Compact Voice
ACEVO (Association of Chief Executives of Voluntary Organisations)
Other
Michael O'Toole – Crown Representative for Voluntary, Community and
Social Enterprise sector (Cabinet Office)
18
For more information please contact
Local Government Association
Local Government House
Smith Square
London SW1P 3HZ
Email: [email protected]
Telephone: 020 7664 3000
Local Government Association
Local Government House
Smith Square
London SW1P 3HZ
Telephone 020 7664 3000 Fax 020 7664 3030 Email [email protected] www.local.gov.uk
© Local Government Association, March 2013
For a copy in Braille, larger print or audio, please contact us on 020 7664 3000. We consider requests on an individual basis.