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Paper 6 - 26 January 2001


26 January 2001


Report by the County Treasurer



That Members consider the County Councilís proposals for a new funding formula for Councils of Voluntary Service, based on the National Association of Councils for Voluntary Serviceís model.


1 Introduction

1.1 The County Council is committed to funding the work of Councils for Voluntary Service and currently does so to the extent of £274,000 in 2000/01 through a formula by which the County Council contributes one third and the relevant District Council two thirds of total support to each CVS. This approach has proved successful in developing a county-wide CVS network, but does not readily allow the County Council to demonstrate that its spend helps to deliver services in accordance with the County Councilís own corporate strategy, nor to demonstrate Best Value. With this in mind, the County Council set up a review group including officer representation from Community Action Hampshire, District Councils (Winchester and Basingstoke), CVSs and the County Council itself in order to explore whether an alternative approach might be feasible. The aim was that, in conjunction with the development of a voluntary sector compact, the County Council would be able to set the contribution it makes to CVSs by reference to its own goals rather than simply following the lead of District Councils.

2 Proposed Approach

2.1 The review group has met over the past few months. The District Council representatives have not as a rule been able to attend, but apart from them seeing the papers there has also been consultation by Ken Dufton (Eastleigh CVS) with those District Council officers dealing directly with CVSs. With that proviso a consensus has been reached on the following approach:

* the broad expectation that the County Council should fund around a third of the CVS spending should continue (note that, as the County Council is prime funder of Community Action Hampshire, the overall District Council Ė County Council contributions to the voluntary sector network as a whole are around 50 : 50).

* the County Councilís main concern is to fund the basic infrastructure whereby there is a CVS in each District Council area to facilitate the provision of basic services and act as a fulcrum for consultation. The infrastructure required to achieve this, and hence the associated funding, does not vary substantially between District Council areas. Most of the relevant costs are fixed ones on which the scale of operations has relatively little impact. The preferred funding approach is therefore to base the County Councilís contribution on the National Association of Councils for Voluntary Serviceís (NACVS) recommended minimum budget for a CVS, which is £81,550 in 2000/01.

* on the principle that the County Council pays one third of this, the result would be a contribution of £27,183 per CVS.

* CVSs are also associated with the provision of community transport and volunteer bureau services. A separate Best Value review is proceeding which will look at community transport, as it was considered that to incorporate this or the full funding of volunteer bureaux into this study would over-complicate it at this stage. However, the management of volunteer bureau is a function which can reasonably be separated out from funding the service elements of volunteer bureaux and 10 of the 11 CVSs carry out this function. This is not covered by the NACVS model and is estimated to cost some £3,000 per year. On the basis of contribution of one third by the County Council, it is proposed to add £1,000 to those CVSs which carry this out.

* it is accepted that the role of a CVS is not static and that new partnership arrangements in particular are tending to increase workloads. Consequently it would be intended to uprate the County Council contribution in accordance with the relevant inflation factor in the Countyís annual budget and to keep under review the role of CVSs and any consequent impact on infrastructure costs. This might, for example, be reflected in any future revision of the NACVS model.

2.2 This approach leads to the funding proposals set out in the Appendices. It is not intended that this should affect the contributions from District Councils. Assuming it does not do so, it can be seen that the long term consequences (all at 2000/01 prices, ie ignoring inflation) are that:

* total support to CVSs and hence the County Councilís contribution to them, will increase

* most CVSs will gain but two will lose by significant amounts.

3 Transitional Arrangements

In view of the increasing pressures on CVSs and the difficulty in managing budget reductions in small scale organisations, it is proposed that as a principle there should be no cash reductions in County Council contribution to any CVS. This can be achieved by:

* phasing in increases in support and

* maintaining the support to Ďlosersí in cash terms ie no inflationary increases would be received but no reductions made. Annex 3 illustrates how this would work in 2001/02 on the illustrative assumption of a 2.5% increase in CVS budgets for inflation.

3.2 The result of this model would be an increase of £34,284 in County Council support to CVSs (at 2000/01 prices, ie for the 2001/02 budget from which it would be hoped to introduce these changes, £34,284 plus inflation). This will be linked to the Compact and the production as appropriate of the SLA (in conjunction with District Councils as appropriate) setting out the functions carried out by CVSs on which the County Council will be relying to demonstrate that its spend represents Best Value.

4 Impact on District Councils

District Councils could either

* buy fully into the model on either an individual or a collective basis so that District Council contributions are also related to the NACVS model or

* accepting that County Council contributions will be made in accordance with the model but not necessarily making their own decision by reference to the model.

4.2 There would be no cost to District Councils, clearly, if they took the second approach and maintained their current contributions. Additional contributions of double those shown in the Ď2000/01 varianceí column would be required from District Councils if they wish to adopt the model to determine their own contributions.

5 Conclusion

Subject to any views expressed at the meeting, it is proposed to introduce this approach with effect from the 2001/02 budget.

County Treasurer

Date: 11 January 2001
Annexes: 4 (hard copies of annexes available on request)
Contact: Paul Carey-Kent - 01962 847525

Last update: 22/01/2001
Author: Nick Goulder, Policy Manager

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