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1 Aims
1.1 This grant funding (*) code of practice between Newcastle City Council (the council) and the voluntary and community sector (VCS) in Newcastle upon Tyne sets out:
- the framework for the grant funding financial relationship
- the undertakings for both sides, based on what each can expect from each other
1.2 The code covers all the funding the council gives in grants to VCS organisations.
(*) 'Grant funding' is defined in appendix 1: glossary of terms.
2 Grant funding and added value
2.1 The council’s grant funding will often enable VCS organisations to add to the value of the funding by:
providing high quality services that are complementary, or additional to, council-run services
bringing more resources into Newcastle
using their expertise to inform and implement council policy
identifying unaddressed needs and better ways of meeting existing needs
fostering, supporting and empowering service users, volunteers and active communities
building bridges between the public sector and the VCS
2.2 The council’s grant funding relationship with the VCS is expressed through the following principles:
focus on outputs and outcomes – the achievement of outputs and outcomes is a key indicator of the success of the grant funding
simplicity and proportionality – processes should be as simple as possible and in proportion to the size of the grant
consistency and co-ordination – where possible, organisations receiving funding from a number of sources within the council should not be overburdened by reporting arrangements
timeliness – planning, applications and decisions will be made in time for the grant funding to have a real impact
transparency and accountability – both by the council in setting its grant funding priorities, and by VCS organisations in the design and delivery of their services
discussion and dialogue – the council and the VCS will cooperate for mutual advantage and focus on the service objectives and needs of the service user or beneficiary.
3 Grant funding framework
The council’s undertakings
3.1 Newcastle City Council is committed to establishing and maintaining best practice in the way it funds VCS organisations. Together with the general undertakings in section 1, the council will implement an effective grant funding framework that:
improves sustainability and longer term planning, e.g. by providing multi-year, rolling grant funding
invests in the capacity of VCS infrastructure
provides effective cooperation between council directorates, streamlining procedures and where possible reducing demands on VCS organisations e.g. reporting
ensures clarity and consistency in grant funding conditions and payment terms
is proportionate in monitoring and evaluation requirements
strengthens partnership working
provides effective arrangements where council funding is matched with funding from other agencies
advertises relevant grant funding opportunities in the NCVS newsletter, on the council web site and through other appropriate means
gives adequate notice of the ending of grant funding to minimise the impact of this on the VCS organisation and its service users
Application packs
In addition to these measures the council will make use of application packs for individual grant programmes including:
general information about the council and the grant funding directorate
background information on the policy aims and overall objectives of the programme
the expected lifespan of the programme
criteria used to assess applications
a timetable
arrangements for notifying and publicising the grants awarded
arrangements for giving feedback on unsuccessful applications
information on performance targets and indicators, how they will be agreed and how monitoring and evaluation will be carried out
an application form with guidance notes for its completion
a contact point for further information and advice.
Voluntary and community sector organisations’ undertakings
3.2 The VCS recognises that the receipt of public funds carries responsibilities to the grant funding body and to those that benefit from the services provided. The VCS undertakes to pursue good practice in the use and administration of public funds by ensuring that they:
are eligible when applying for grant funding
are open, transparent and timely in reporting activity
give early notice of variance to what has been agreed e.g. grant underspends
wherever appropriate, involve users in the management of the organisation and its services
wherever appropriate, involve users in the design and development of activities and services
where appropriate, encourage the involvement of volunteers in service provision
give clear public acknowledgement of government and council support
have clear lines of accountability and responsibility for joint or match funding bids
4 Types of grant funding and core costs
4.1 Three types of grant funding are described below. These are a) strategic, b) project and c) development grant funding. A single organisation may receive more than one type of funding at the same time.
4.2 VCS organisations submitting applications for grant funding are responsible for costing and planning their work. This includes cost increases over time such as salary increases or compliance costs resulting from new legislation. The council will seek to encourage applicants to produce realistic budgets to help ensure that agreed outputs and outcomes are achieved.
a) Strategic grant funding
4.3 With strategic grant funding, the funder has an overview of the kind of activities and organisations that should be funded to meet particular long term aims. It enables the council to ensure that sufficient capacity exists, and assists longer term planning and stability within the VCS. It takes account of the objectives of the funded organisation and its need to operate efficiently and effectively.
Through strategic grant funding, the council is prepared to make a significant (but not 100%) contribution to the core costs of a VCS organisation. It is used to support core operational activities where:
these activities match the objectives of the grant funding and the VCS organisation is able to deliver them at a level and to an audience that the council is not
the council recognises the value of a particular organisation e.g. through its track record or strategic position and its role in the wider VCS, and wants to support that role
the council wants to assist a particular target group
4.4 Strategic grant funding forms part of an ongoing relationship between the council and the funded VCS organisation. It will usually be considered over a number of years, based on a number of factors including:
the availability of grant funding
a statement of the expectations that the council has of the VCS organisation e.g. that they make informed responses to consultations with the relevant part of the VCS, that they have ongoing input to issues of shared concern
value for money
an agreed framework for monitoring and evaluation
a formal review process
4.5 Strategic grant funding tends to be for three-year periods, during which the funded organisation may submit an application for renewal of the grant.
Strategic grant funding is not an open-ended commitment to a VCS organisation. The intended duration of the grant funding arrangement will be made clear at the beginning of the process.
The council retains the right to exit from the funding relationship. The circumstances in which the grant funding arrangement may be ended will be outlined at the beginning of the process. The council undertakes to give notice of its intention to exit a funding relationship in sufficient time to allow the organisation to manage the consequences, especially for service users and staff, as effectively as possible.
4.6 The interests of the council and VCS organisation that receive strategic grant funding are closely tied. VCS organisations receiving strategic grant funding will be informed in good time prior to, and given the reasons for, any reduction in their funding.
b) Project grant funding
4.7 In some cases it will be more appropriate for the council to provide project fu nding to meet the costs of a specific piece of work or activity for an agreed period of time, often longer than a single year, rather than enter into a s trategic funding relationship. However, annual bidding for project work which both the voluntary or community organisation and the council intend to last longer than one yea r wastes resources. In such cases it is good practice for project grants to be awarded for the duration of the project as agreed at the beginning, subject to a satisfactory annu al review of pr ogress and the availability of resources.
4.8 The council should make clear that it is acceptable practice for appli cants to include an element of their core co sts in applications for project funding. Applicants need to show how this represents value for money and contributes to the outputs of the project. This approach requires voluntary and community organisations to be much more explicit about the nature of their core costs and how they apportion them, to avoid double funding. The council may agree to meet either a proportion of the group’s overall core costs (where these have not been met by funding from another source) or those core costs that have increased because of the particular piece of funded work.
c) Development grant funding
4.9 There are periods when VCS organisations require grant funding to grow and develop. There may, for example, be new opportunities to do more work in their specialist area. However, the VCS organisation may not be able to take up these opportunities until it has increased its capacity. Development grant funding can be an investment in the capacity of the VCS organisation. It can be used to develop VCS organisations from those sub-sectors that tend to have limited access to council funding, e.g. the black and minority ethnic sub-sector. It will:
be for an agreed period of time, appropriate for the work funded. Some organisations may need grants for a relatively short period while others may require longer. In every case this will be subject to review
state the expected outputs and outcomes and the way progress will be monitored and evaluated
provide a realistic exit strategy for the council and the funded organisation
Core costs
4.10 Many VCS organisations have difficulty in securing grant funding towards their core management and administration costs. (For examples of core costs see appendix 3: typical core costs). For them to operate efficiently and effectively, these costs need to be met. The council can use grant funding to help with core costs. Sometimes this assistance will be in kind e.g. by offering a peppercorn rent. The aims of this are to:
Except in exceptional circumstances, the council will not grant fund 100% of an organisation’s core costs. A contribution to core costs would normally be expected in bids for grant funding. The VCS organisation will specify this in their application.
The method chosen by VCS organisations to allocate relevant core costs should be equitably allocated between funders. Where there are several funders of different services delivered by a VCS organisation, core costs should be recovered only once. The VCS organisation, the council, and the other funders should be able to calculate these amounts simply and without difficulty.
5 Accessing grant funding
5.1 Access to grant funding should be fair and transparent. To promote this the council will:
publish an annual guide to the council’s grant funding programmes, including clear procedures on how the programmes are managed
consider the views of the VCS when developing new grant funding programmes and the evaluation of existing programmes. This allows the aims and objectives of the grant funding programmes to be based upon local knowledge of the subject area and hence more relevant to potential applicants and service users
give appropriate advance notice of new grant funding programmes before the application process starts
make details of the grant funding programme widely available, e.g. through the press, umbrella and intermediary organisations, VCS networks, directories, newsletters, and the internet
recognise that clarity about the grant funding programme assists potential applicants in deciding whether to apply. This reduces the number of inappropriate applications and requests for explanation or clarification
ensure that application forms and guidance notes are readily available to applicants, including on the internet
where appropriate, provide information in Braille, large typeface, audio, and in languages other than English
encourage applications from those sub-sectors that tend to have limited access to council funds, including black and minority ethnic VCS organisations
recognise the potential of faith community organisations to contribute to social inclusion as distinct from promoting religion. Failure to understand this could lead to faith organisations being incorrectly assessed as ineligible for grant funding
provide a timetable for applications that is realistic e.g. not less than three months, and that allows membership organisations time to disseminate information about the grant funding programme and to offer guidance and support
where practical, offer opportunities to potent ial a pplicants to discuss the grant funding programme with releva
nt offi cers
consider training needs. Giving detailed briefings to advisors in umbrella or sup port organisations means they can help potential applicants. With some grant funding programmes, direct training or briefing sessions with potential applicants will be more practical or appropriate. This may inc lude the nature and scope of the programme, completion of application forms, financial management of the grant, how to set and agree objectives, and monitor ing and evaluation procedures
consider how the grant funding programme could encourage applications from new organisations or could fund innovation, particularly from those VCS sub-sectors that have limited access to council grant funding e.g. black and minority ethnic VCS organisations. This will help overcome any perception of a closed system favouring a few, select organisations
regularly review the adequacy of arrangements for ensuring fair access to grant funding
6 The application process
6.1 The council uses a corporate grant funding application form. This offers a consistent approach and assists the efficient management of grant funding programmes.
6.2 The VCS undertakes to assist the council by providing feedback on the use of application forms. The VCS recognises that the drive for greater consistency does not mean that application forms will be identical.
Electronic completion
6.3 The council will provide grant funding application forms electronically. When circumstances permit, the council will provide facilities for the electronic completion of grant applications via the internet.
7 The assessment process
7.1 The council recognises that the assessment process should be open and objective so that VCS organisations may understand how applications are assessed. The stages of assessment are:
assessing eligibility
initial assessment (including risks)
detailed assessment of applications (including risks)
decision making process
informing applicants on outcome of application
7.2 Grant funding directorates will give a deadline for applications. VCS organisations applying for grant funding will submit their application on time. Those failing to do this will have their application rejected on its initial assessment, unless they have agreed an extension in advance and in writing with the appropriate council officer.
8 Notifying decisions
8.1 The council should give a provisional decision on grant funding at least two months before the grant is due to start or be renewed. Final decisions are subject to the council’s annual budget.
The council should give final decisions to applicants at least one month before the grant is due to start or be renewed. Applicants should be informed of delays in the process that mean this timescale will not be adhered to.
8.2 Where the funding granted is less than the amount applied for the implications for the VCS organisation will be considered and, where possible, discussed with them in advance of any final recommendation.
8.3 Notification documentation should include:
the amount and period of grant funding
the purpose for which the grant funding is made, listing any specific exclusions
standard terms and conditions
any restrictions or conditions outside the standard terms and conditions
jointly agreed performance indicators and targets
jointly agreed monitoring and evaluation arrangements
arrangements for payment
two copies of the offer of grant letter; one to be signed and returned by the funded organisation, the other to be retained by the funded organisation for its records
8.4 The applicant will be given a contact point to raise any query as to whether their application was assessed in accordance with the grant programme’s published process.
Complaints about funding decisions
8.5 The council and NCVS recognise that there is no right of appeal against the council's decision on whether or not to award a grant, or on the amount of grant awarded. However, if at any stage an applicant believes that the proper processes have not been followed by the council in dealing with the application, or that the council has not dealt with the applicant in a fair and impartial way, they should contact the council in writing as soon as their concern arises and in any event no later than 14 days after receiving the grant funding decision. Any such complaint must explain precisely which facts the applicant relies on in alleging unfairness or breach of process. The applicant will send the written complaint to the manager of the contact officer. (The contact officer will provide the manager’s name and address on request.) Once the manager has received the written complaint, it will be dealt with under Stage 1 of the Council's Corporate Complaints Procedure. (The manager will provide details of this procedure on request).
8.6 As stated at Section 1, 15.2, complaints relating to the provisions of the Compact and its codes are covered by the procedure outlined in the Compact document ‘Procedure for Resolving Disagreements’ (July 2005).
9 Publicising grants awarded
9.1 The council’s grant funding programmes will include clear arrangements for publicising the grants awarded e.g. inclusion with notification letters, press notices, or postings on the council’s website.
9.2 Publicity arrangements will be specified in the guidance notes for each programme. The VCS undertakes to meet them unless there is a clear reason why this is detrimental to vulnerable client groups.
10 Providing feedback on grant applications
10.1 The council recognises the importance of providing feedback to grant applicants.
10.2 Providing individual feedback to every applicant can take up a lot of resources and may not be possible. The VCS therefore accepts that feedback on applications may be included in notification letters using a standard format.
10.3 Directorates will also consider setting out the main reasons for success or failure and making them available to each applicant.
10.4 Unsuccessful applicants will be advised by their contact officer how and when they can receive feedback on the reasons for refusal. This will be within a time limited period.
11 Grant funding conditions
11.1 All grant funding is subject to the council’s corporate terms and conditions. The council undertakes to make these available with the grant funding application materials or on request.
11.2 Where additional conditions are required, these should be no more than are necessary to allow the council to satisfy itself that public money:
11.3 The council will take care to avoid conditions that prevent organisations properly managing their own business.
11.4 The council will set out clear requirements for the sale, transfer, or other disposal of assets or equipment bought with its grants before a grant is made for such items.
11.5 An appropriate condition will be applied to any copyright or intellectual property issues that may arise as a result of the grant or contract.
11.6 Circumstances may arise where it is in the interests of both the council and the funded organisation to revise the funding agreement. In such cases, the council and the funded organisation will agree and record revisions in line with the council’s corporate terms and conditions.
12 Payment procedures
12.1 All payments will be processed in line with the council’s financial procedures. No payments will be made until the letter of acceptance and grant conditions has been returned signed by the named contact and either the chair or other designated officer of the VCS organisation. A date for the return of the acceptance letter will be specified. This will help ensure that payments begin on time.
12.2 The council’s standard financial procedures do not normally allow for regular payments in advance. However, the council recognises that many VCS organisations do not have the resources to undertake work and receive payments afterwards. Payments in advance of expenditure can be made where the VCS organisation shows the need for them and an assessment of the risk has been taken into account. Examples of this type of need should be included in the financial information submitted by the applicant. The council recognises that all VCS organisations are expected to hold reserves.
(For charities, the Charity Commission provides a guidance leaflet, CC19. This is available at www.charity-commission.gov.uk. In practice, many charities hold reserves well below these levels.)
12.3 Payments will be made in instalments relating to the size of the proposed grant and the nature of the VCS organi sation. The council&r squo ;s current policy is as follows:
Grants up to £4,999 will be paid in one instalment
Grants between £5,000 and £9,999 will be paid in two instalments
Grants of £10,000 and over will be paid in four instalments
12.4 To obtain payment th e funded organisation will:
make a statement that any previous grant has been spent or allocated for the purposes for which it was given
give brief summaries of income and expenditure to date
produce a forecast of expenditure for the next grant period.
The VCS organisation will be able to validate this with proper records.
12.5 The grant funding directorate will decide which controls, if any, are necessary to monitor the continuing viabilit y of a funde d organisation. If doubts about a VCS organisation’s financial viability arise no further grant payments will be made. In such circumstances the council, in consultation with its lawyers and auditors, will review the situation.
13 Using underspends
13.1 Under the terms and conditions of the grant, the funded organisation will notify the council of any anticipated underspends as soon as possible. Should underspends occur within individual grants and where the council will allow the grant funding to remain with the funded organisation, a written agreement will be reached on how the grant funding can be used.
End of year flexibility
13.2 VCS organisations that are grant funded for more than one year and who are properly meeting the terms and conditions of their grant funding should be allowed to carry over a reasonable amount from one financial year to the next, proportionate to the size of the grant. Funded organisations must seek the prior written agreement of their grant funding directorate before they do this.
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