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1 Consultation on publishing voluntary and community sector spending data Analysis of responses, April 2013
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Page 1: Consultation on publishing voluntary and community sector ... · It is clear from the consultation responses from councils that any additional requirements for classifying and publishing

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Consultation on publishing voluntary

and community sector spending data

Analysis of responses, April 2013

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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

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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

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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.

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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

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and excluded

o Review the definition of social enterprise organisations and how

they can be best identified.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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)

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For more information please contact

[email protected]

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.


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