£300m boost to voluntary and community sector

The Government announced today it will create a new investment fund worth £125m over three years to help overcome barriers to effective service delivery, increase the scope and scale of voluntary sector services and modernise the sector for the future. The new fund will be designed and administered in close consultation with the sector.

Paul Boateng, Chief Secretary to the Treasury and Chair of the cross cutting review, said:

“This is a first for the voluntary sector: direct involvement in the design and administration of a major new fund – worth £125m - to remove barriers to service delivery and modernise the sector for the long term. We have listened to the sector and acted to place them at the heart of this Government’s modernisation and productivity agenda.”

In addition the Government will invest in the voluntary and community sector to help build a strong and independent sector which is able, where it wishes, to work in partnership with Government to deliver world class public services.

The £188 million settlement over 3 years to enable the Active Community Unit (ACU) at the Home Office will enable it to deliver in full the recommendations of the cross cutting review of the voluntary sector.

Welcoming the settlement, Home Secretary David Blunkett said:

“The settlement demonstrates the Government's continuing commitment to long term partnership to increase voluntary and community sector activity, and to encourage increased community participation. With its new leadership and changed focus, the ACU has the resources to develop and lead this new phase in the Government's relations with the sector. The Chancellor and I will be working on ways in which the Government can encourage and support the voluntary and community sector's contribution to our shared goals.”
Following the cross cutting review, all Government Departments will work together to build capacity in the sector, improve the funding relationship and fully implement the 1998 Compact on relations between Government and the voluntary and community sector.

Notes for editors

1. The cross cutting review of the role of the voluntary sector in service delivery was one of seven announced by the Chief Secretary to the Treasury last summer. Its terms of reference were to examine the Government’s relationship with the voluntary and community sector and make recommendations for improvement.

2. The recommendations set out a challenging and exciting agenda for both Government and the sector. Government will:

involve the sector in the planning and design as well as the delivery of services;
develop long term strategic relationships with the sector;
build capacity within the sector;
move towards a funding regime which is transparent and recognises the full costs of delivering services;
ensure that the 1998 Compact between Government and the sector is implemented in full at central, regional and local government levels.

3. The Compact on relations between Government and the voluntary and community sector was published in 1998. The Compact provides a framework for honest and effective engagement between Government and the sector, recognising the sector’s independence and its different ethos.

4. The Compact supports the independence of the sector, including its ability to campaign, comment on Government policy and challenge that policy while working closely together with Government. The Compact is underpinned by detailed Codes of Good Practice in five key areas: funding; policy appraisal and consultation; volunteering; the BME voluntary sector; and community groups.

5. The Active Community Unit (ACU) will take the lead in implementing the detail of the review. The ACU was re-launched in May 2002 following the appointment of Helen Edwards, formerly Chief Executive of NACRO, as director of the Unit at the beginning of the year. Its budget for encouraging volunteering is £35m for the current year. This will rise to £60m in 2003-04, £63m in 2004-05 and £65m in 2005-06. The average annual real terms increase is 20%. These resources (£188m) will be used to implement the recommendations of the cross cutting review and to increase voluntary and community sector activity, including community participation, by 5% by April 2006.

6. In addition to the ACU settlement the Government will introduce a new investment fund worth £125m (25/40/60) over three years to help the voluntary sector overcome barriers to effective service delivery and modernise infrastructure for the long term. The Government will involve the sector closely in the design of the fund. In addition the Government has made available £25m to the voluntary sector to give help with parenting skills.

7. The Government conducted a comprehensive review of public services - the Comprehensive Spending Review - in 1998. The 2000 Spending Review built on this by setting targets and allocating resources for the three years to 2003-04. The 2002 Spending Review revises these plans for 2003-04 and outlines new plans for 2004-05 and 2005-06.

8. For further details please contact the Treasury press office on 0207 270 5238 or visit the 2002 Spending Review section of this website.