Design of £125m Futurebuilders completed

Details of the £125m Futurebuilders investment fund to assist the voluntary and community sector to deliver public services were announced today. The fund will be used to provide access to finance for voluntary and community organisations and social enterprises to deliver public services in five key service areas.

The fund will be used and distributed in different ways tailored to suit the varied needs of the voluntary and community sector. This will include grants and various types of loans. Loans will primarily be given to organisations that cannot raise finance on the commercial market. There will be flexibility to use a mixture of types of finance for individual schemes, as well as the ability to phase in the finance over time.

The fund will be managed outside Government by institutions tuned in to the needs of the sector. An open competition will be held to appoint the fund manager(s) who will determine which organisations are eligible to receive the fund based on the principles published today.

Paul Boateng, Chief Secretary to the Treasury, said:

“ The Government wants to make it easier for the voluntary and community sector to contribute to public service delivery. Futurebuilders will fund the best ideas in order to create exemplars that inspire and lead in voluntary and community sector delivery of public services. The fund will showcase what the sector can do when enabled to function at its best. I am confident that the unique design of the fund will help the money reach those in the sector who will make best use of it.”

The fund’s design is based on a joint assessment by Government and the sector of what is needed and what will work most effectively for the sector.

Sir Michael Bichard, Chair of the Compact Working Group, said:

“Futurebuilders marks a new way of working between the voluntary and community sector and government. It underlines the value of the Compact as a vehicle for strengthening the partnership between us. This is demonstrated by the fact that today’s report is a joint publication by Government and the sector.”

Notes for editors

1. Futurebuilders is a one-off investment fund spread over three years to March 2006.

2. The next stage in setting up the fund will be to appoint the fund manager. The open competition to do this begins this week. The fund will come on stream once the fund manager(s) has been appointed in November.

3. Futurebuilders will continue to be an exemplar of the Compact, during the appointment of the fund manager. Sir Michael Bichard will chair the panel that will assess the bids.

4. The design of the fund means access to the fund will be supported by information and advice about eligibility and the different types of finance available. In this way, organisations will receive help to explore the range of possibilities within Futurebuilders for financing the service developments they want to undertake.

5. The fund is aimed at:

Existing service delivery organisations that want to do more
Organisations new to service delivery and;
Existing and new service providers that want to deliver services in a different way.

6. Futurebuilders is a mainly capital fund, with £100m of the fund set aside for capital investment and £25m for resource funding to support capital investment.

7. Futurebuilders is targeted at organisations working in or across the service areas of:

health and community care;
crime;
community cohesion;
education and learning; and
support for children and young people.

8. The Compact on relations between Government and the voluntary and community sector in England was published in 1998. The purpose of the Compact was to set out an agreed framework of principles to govern how Government and the voluntary and community sector should work together. Further details of the Compact are available on the Compact Website

9. The Compact Working Group takes forward the Compact in the voluntary and community sector. Its focus is on continuing to develop, implement and monitor the Compact. The role of the Compact Working Group in Futurebuilders is to:

approve and oversee the process - in effect to 'Compact proof' it; and
submit final proposals for use of the fund to the Chief Secretary to the Treasury.

10. A leaflet summarising the fund is available from:
Correspondence & Enquiries Unit, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ.
Tel: 020-7270-4558
Email Public Enquiries

11. The full Futurebuilders report and the summary of the consultation are available on the Treasury website and the Compact Working Group website

12. Media enquiries should be directed to the Treasury press office on 0207 270 1755