Charities in Jersey should be given greater financial stability through guaranteed three-year Government funding cycles, a new report has recommended – just months after short-term funding was highlighted as a major source of stress and frustration within the third sector.
The Public Accounts Committee – the panel of politicians responsible for scrutinising how public money is spent and saved – today released a report into the Government’s procurement process.
It made 30 key findings and 19 recommendations.
“Financial security” for charities
Among these was the recommendation that the Government should review the current funding cycles for charities – with a view to moving towards a guaranteed three-year cycles.
“This will assist charities in terms of financial security and also feed into the long-term vision for Government services to the public,” the report said.
The committee recommended that this should be completed in time for inclusion in the Government Budget 2027 – 2030.
It comes after a damning report by the Association of Jersey Charities published earlier this year revealed that some charities had been left teetering on the edge of financial collapse while waiting for Government support.
‘The Power of Partnership’ report found that “short-term funding is blocking charities’ ability to function effectively and deliver for islanders”.
It said: “One of the biggest causes of frustration and stress among charities is around the processes of short-term funding cycles, with some charities reliant on annual grants of over £1million, not receiving confirmation until December the year before the funding is due.
“This exposes charities to significant financial risk in a sector where cash flow is so critical, and can deter those who would otherwise fund or work for the charity.”
I haven’t been able to make a strategic plan this year because if I don’t know if I’ve got funding. In six months’ time, I might be closing services, not building on a nice strategy. That’s a big issue.
local charity
The AJC recommended that multi-year funding arrangements should be standard, and an index-linked annual uplift should be included for charities to be sustainable.
The report said: “A number of charities spoke of agreed funding arrangements being withdrawn last minute, or funds taking months to be received.
“They spoke of operating skeleton staffing structures while waiting for funding confirmation, of pending redundancies or even insolvency risk.
“No organisation can work effectively in this way. It puts charities under significant pressure and exposes them to financial risk.
“Charities are key delivery partners for Government and should be treated with more respect than the current funding practices demonstrate.”
“A silo working culture in Government”
The AJC report also found that “no mechanism to secure cross-departmental funding” from Government.
“Several of the charities we spoke to said that they struggled to secure Government funding as they did not neatly fit into one department,” it said.
“Our interviews clearly demonstrated that there is a silo working culture in Government when a cross-departmental funding approach is needed.”
The AJC described one local charity which was in receipt of benefits from long-term
care, but not enough to fund their entire service.
The charity therefore had to go to Government regularly for top-up grants – despite no formal agreement surrounding them.
“This not only caused a significant amount of stress to all involved, but also meant the charity was regularly under financial strain,” the report said.
“It is unacceptable that a charity that delivers public services on behalf of Government
finds itself in that position.”
“A number of issues” outlined in review
Now, the Public Accounts Committee has recommended that the Government should seek to introduce a single point of contact which can assist charities in the negotiation and renewal of contracts for charities providing services across more than one department.
“This will assist charities in providing a single point of contact and provide better value for money for Government,” the committee said.
The should be put in place within the first quarter of next year, according to the report.
Following the publication of the procurement review, committee chair Deputy Inna Gardiner said: “We launched this review to ensure value for money and effective governance structures were in place when it comes to Government procurement.
“There are a number of issues which were brought to our attention during our review and we have made a series of findings.
“We hope that the Government will consider our recommendations and we look forward to hearing its response.”