By Penny McLean, Ezechias Ngendahayo and Tom Green

As Head of Overview and Scrutiny at London Councils (the body representing London boroughs), Ian Redding has helped implement a major change in the way the body funds the voluntary sector. We asked him about the new process, how it has affected refugee community organisations (RCOs) in the capital and the trends in funding across the country.

London Councils has moved from a straightforward grants system to commissioning services from the voluntary sector. Can you explain how and why this came about? 

Basically, we felt that needs weren’t being met effectively across London. The old system was about funding organisations, and we relied on them to come up with proposals for projects and services. Now we are funding services that we know need to be delivered. There’s no reason why the same organisations we funded before can’t deliver those services – indeed, many of them are.

Service-based funding is now common for public sector bodies across the country. There’s a real pressure from central government to show outcomes and efficiency, so funded bodies have to be able to demonstrate that their work has impact. There’s also an emphasis, in London and elsewhere, on organisations working together to deliver these services – across geographical areas and organisation type.

How are the priorities of services decided?

After the initial review of our funding process in 2004/5 we published a consultation paper and started to identify potential services. We consulted widely with as many organisations as possible including boroughs, other funders, 3rd sector organisations ranging from those operating across the whole of London to those working locally, as well as the public more generally, as well as using all the data at our disposal. It wasn’t easy coming up with a final list but we only have £28 million to spend each year so our committee of London local authority leaders had to make some tough decisions. In the end they agreed on a list of 59 priority areas that cover a very wide range of needs.

A specification was drawn up for every service, including the outcomes targeted for that service, the geographical spread of need for the service, the policy context (for example, Child Poverty or Every Child Matters), findings of any relevant research conducted on the issue, the role of other funders, how the need manifests itself and examples of how it has most effectively been addressed. We then did more consultation before these specifications were finalised.

What stage of the funding process are we at now?

Bids to be commissioned to provide the specified services began in a first phase in 2007, and all bidding rounds were completed by early 2008. Some commissioned work is already being delivered, and all service funding is expected to have started by early 2009. The next funding round is likely to open in 2011.

Can organisations access any London Councils funding before 2011?

Not through the main funding rounds. However, funding under our Poverty priority is mainly through our ESF co-financing programme, which is to a considerable extent determined by the EU’s latest priorities. These run for two years at a time and the next programme is expected to be for 2010 to 2012.

Another possibility would be to consider working with an organisation that has been commissioned, if you feel that you could be a valuable partner to them, maybe to help them access people from London’s hardest to reach communities for example.

What happened to organisations that lost out on funding in the latest round?

The old-style funding ended in June 2007 but we really didn’t want to leave organisations stranded whilst the move to commissioned services was taking place. That’s why the Grants Committee awarded transitional funding to those organisations it had been funding whose work most closely resembled the kinds of service that were going to be commissioned.

Transitional funding continued until newly commissioned services started, even for those that weren’t successful in being commissioned. Whatever the stage of an organisation not being successful we gave a full six months notice of funding ending, giving organisations as much time as could reasonably be afforded to find alternative sources. We also funded second-tier organisations to help those who wanted to bid to be commissioned, and also to help those who did not want to bid or who ultimately were unsuccessful.

Does the new system favour bigger organisations?

It shouldn’t do. Our funding has to be for work across more than one London borough so it doesn’t tend to go to the very smallest organisations anyway but as the services are focused on providing services to all who have the need wherever they are in London, we really don’t want to miss funding those organisations best placed to serve the hardest to reach communities.

Isn’t there a problem with the needs of refugee communities being overlooked simply because they are often overlooked in official statistics?

Yes, I think this is a real problem. It has been estimated that at least 100,000 people in London at any one time are not on official records, but many feel that this is hugely underestimated and that the figure could be nearer 500,000. Whatever the true number, inaccurate population statistics mean that London boroughs don’t get the funds needed to help these people. So we’re keen to improve this data if we possibly can and make sure London gets the money it needs to help all who live here.

How will you monitor the success of London Councils funding?

As funding is for typically for four years, it will take some time before we are fully aware of how successful the funding has been. Consequently we need to look at things in a number of ways.

The first step is to commission an independent evaluation of the success of the processes themselves in securing the right organisations to provide the 59 services; this we will do jointly with the 3rd sector itself as we all want to make sure that the services provided are successfully delivered. If there has been a problem for smaller organisations, or organisations from different parts of London have had less success than others, or maybe organisations from a particular ethnic community appear to have been disproportionately less successful, we need to understand why and make sure the process is improved for the future.

The organisations that are commissioned will enter into agreement with us focused on how they will achieve the outcomes and what the targets and milestones for this will be along the way; they will submit information to us every six months to reflect on progress which we will analyse both for them as an individual organisation and also together with others providing the particular service across London. That information will be made public to ensure that everyone with an interest in the success of the service can find out what progress has been made. Every organisation is visited by one of our experienced grants staff in every year of funding too.

We have also set up Strategic Monitoring Zones across London to look at the monitoring information to see how the services are working in local areas of London. These zones are monitored by local councillors, borough officers and representatives of the local 3rd sector, to see whether the services are achieving what they should and, if not, to work out why and identify how to address the cause. At every stage it is about working with the commissioned organisations to try to ensure successful delivery.

Some groups have complained that even though they scored highly on the points system they still weren’t successful. How were bids assessed?

Wherever possible we use the highest scoring bids. However, we also had to consider the geographical spread of services we were funding across London and to ensure we were targeting those in most need. All applicants receive feedback on their bids, having full access to the reports that the Grants Committee receive to help inform their decision (which includes the scores that all bids received). They also have a right to reply if they feel that their application has been misunderstood or misrepresented, which the Grants Committee consider at the same time as the report and its recommendations

Can you explain what the new policy voice and engagement groups are that London Councils have funded and how they work?

The 59 service priorities recognise that getting the best services for people isn’t always about adding new ones but more about ensuring they are better designed to meet everyone’s needs. Amongst those 59 there are five services specifically targeted at providing those most disadvantaged or discriminated against to have their voices heard and to have their interests represented to ensure public services reflect the needs of all who need them, or to influence policy makers as new approaches to tackling problems or issues affecting Londoners are being developed. This has become increasingly important for local authorities as from 1 April 2008 they have responsibility for actively involving and engaging their communities in shaping services and the places in which they live.

The five areas are Older People, Deaf and Disabled People, Women; Gay, Lesbian, Bisexual and Transsexual People, as well as Black, Asian Minority Ethnic and Refugee (BAMER).

How long are these groups funded for and how were they selected to represent BAMER group across the whole of London?

These groups will be funded for four years, subject to regular review to ensure they are meeting their targets, the same period as the majority of our funding. The method of selecting the groups was identical to all other services, the final stages involving drawing up a specification for the services needed and the outcomes the successful bidders are to work to achieve. Bids were scored, compared to London’s ethnic make-up and associated patterns of needs, and the best “package” of groups to address these needs recommended to Grants Committee.

It’s important for small BAMER organisations to have a voice in how London funding is distributed – what is the most effective way for such groups to contact London Councils?

There are many ways that organisations can engage with London Councils, though we do try to ensure that there are proper channels in place to make it easier for everyone. The six BAMER policy and voice organisations are going to be:

• Race on the Agenda
• Education Action International
• Migrant and Refugee Communities Forum
• Black Neighbourhood Renewal and Regeneration Network
• The Asian Health Agency
• Irish Travellers Movement in Britain

We also fund organisations such as London Civic Forum specifically to enable Londoners to communicate with public bodies across the capital.

We also have some long standing partnerships with the 3rd sector, one being through the Voluntary Sector Forum which is a representative body of all the organisations that London Councils funds, the other being a London Councils/3rd sector steering group which has helped us hugely in shaping our funding practices over recent years and helped us to ensure they are as inclusive as possible and that decision-making is as transparent as possible.

Whenever new priorities are set for our funding they are always subject to the widest consultation. The three themes that underpin all of our funding are:

• Addressing disadvantage
• Addressing discrimation
• Creating opportunities for all.

So, ensuring we get input from all of London’s communities is of key importance.

What do London Councils think about the Department for Communities and Local Government (CLG) proposed Cohesion Guidance for Funders – how will they be responding to this consultation?

London Councils is a representative body of the 33 London boroughs, and not just a funder of the 3rd sector. As boroughs may all have their own individual views on the issue it is not possible to respond to CLG’s proposals with a collective voice. So, instead, we have worked with the London Funders organisation to submit a response on behalf of all of the major funders in London.

That response makes it clear that while funders may share the vision that cohesion and integration has to be the ultimate target, the paths that communities need to take to get there can be very different. In many instances the funding of single community organisations is of key importance, for example for those that are newly arrived, need to support each other, or to build confidence and capacity.

It also has to be remembered that some services can only ever be provided by single community organisations if they are to be available to all that need them. London Councils Grants Committee’s commissioning decisions strongly reflect this, with many examples of services being provided across London with a mix of generic service providers and single community service providers in order that the service has the reach required.

More information about the funding process can be found on the grants section of the London Councils website.

Penny McLean is Information Officer for the Refugee Council’s Development Team and the Basis Project. Ezechias Ngendahayo is Projects and Training Coordinator for the Refugee Council’s Development Team. Tom Green is the Basis Project Website Coordinator.