So, who is responsible for the Big Society Network’s wasted millions?

Former Big Society Network CEO, Steve Moore, posted the second in what he promises will be a ‘series’ of pieces about his reflections on the organisation’s brief existence.

Moore is to be applauded for sharing his views on BSN’s demise. Those involved in the failed charity have been remarkably quiet in recent months and his willingness to present his take on events is a welcome contribution to the debate.

However reading the post, I can’t help the feeling that it is a carefully crafted attempt to absolve himself of any responsibility for the shambles that BSN presided over and to clear the path for future activity. It’s not surprising that Moore would wish to put as much distance between himself and what happened, but it doesn’t help answer the questions that remain over what the hell went on at the Prime Minister’s favourite charity.

The succession of meetings that Moore reports took place are frankly neither here nor there. He is at pains to tell us that Steve Hilton, Nick Hurd and various other people never attended these meetings. Fine, but that cannot possibly ‘prove’ they – nor anyone else who didn’t attend these meetings – were not involved in decisions to fund BSN with millions of pounds. This is the main point that I, and numerous others, have been harping on about for the last few months and is definitely not addressed in Moore’s blog.

Who made the decisions to award millions of pounds to an organisation that failed repeatedly to deliver social impact with public funds? And why did public bodies bend over backwards to make these grants if it wasn’t due to Ministerial pressure?

Moore paints a picture of himself as an innocent bystander as the assembled flawed characters surrounding the Network row among themselves and fall out of love with the whole Big Society project. Al Gore’s cameo appearance in the story is frankly just baffling.

Moore clearly doesn’t intend to take any prisoners and gets things started with some pretty scathing views of Nat Wei, who he describes as having ‘no discernable charisma’ and ‘no one’s idea of a public advocate for a future Prime Minister’s big idea’Perhaps Lord Wei is no longer considered politically useful, and certainly his stock has fallen since he gave up the role as Big Society advisor to the PM.

Nesta, who pumped over £500,000 into BSN – under duress according to their trustee at the time, Liam Black – never raised any concerns over delivery or social impact. If that’s true it contradicts the findings of the NAO’s investigation into the affair and Geoff Mulgan’s internal investigation, both of which suggest under-performance issues were raised with BSN.

Paul Twivy’s radical plans for Your Square Mile were ‘hated’ by Downing Street head honcho Steve Hilton – which Moore presents as evidence somehow, that BSN was not politically supported.

Hilton hated it, so then (naturally) the PM hated it. And Moore describes a wedge between Twivy’s vision and David Cameron’s.

Undeterred Twivy pursued the Your Square Mile project outside BSN – but taking with him a large grant from the Big Lottery Fund, just 48 hours after it was handed over to BSN. It might be considered unusual to award a grant to one organisation, only for it to be immediately transferred to another organisation – but perhaps that was what was planned all along. Either way, not a penny of that grant was spent by BSN according to Moore – so apparently BSN can’t be held responsible for the abject failure of that particular project.

There is plenty in the piece about why David Cameron, his Ministers and advisors and most of all Steve Moore, are not responsible for how £3m of public money was awarded and then frittered away.

So who is responsible if it’s not the politicians or those tasked with delivering these projects?

Perhaps it’s the funders – Nesta, Cabinet Office and the Big Lottery Fund?

But since they are all public bodies (or were at the time, in the case of Nesta) accountability still rests with government.

Perhaps we’ll never know. But one thing is for sure, this tale of political intrigue and missing millions is no clearer than it was before this post.

And if anyone knows why Al Gore at a coffee machine makes an appearance in the post I’d love to know, as I can’t for the life of me understand.

The ‘disappointing’ disappearance of £3m of Big Society funding

The National Audit Office’s second investigation into funding awarded to the Big Society Network, and its parent body the Society Network Foundation, was published last week. It is peppered with descriptions of Big Society Network’s activity by those who funded it as ‘disappointing’ ‘weak’ ‘concerns’ and ‘performed poorly’. And yet, despite all the disappointment those funders obviously felt the money continued to roll in. Over £3 million pounds of public money in total.

I don’t know about you, but if I see someone wasting £3 million pounds of public money ‘disappointing’ doesn’t even begin to describe it. I would be incandescent with rage. I would be fuming. Completely and utterly livid.

Disappointing?

What is disappointing is that those holding the purse strings on trust for all of us can be so blasé about such a scandalous waste of public money. That is certainly disappointing.

What is also disappointing is the lack of responsibility the Prime Minister is taking over this whole sorry affair.

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Consider the facts as the NAO present them:

The Prime Minister’s Office “asked the Minister for Civil Society to renew funding” – this after the Cabinet Office had withdrawn funding for one Big Society Network project and been judged to be performing poorly in its wider contribution to the Big Society. As a result BSN were awarded further funds.

Officials at the Cabinet Office advised that it “would not be appropriate to grant fund an organisation that is in financial difficulty or that is struggling to appropriately manage its financial affairs”.

When Society Network Foundation eventually filed their statutory accounts (several months late) they showed a deficit of £181,000. Clearly someone with the authority to do so decided to ignore the advice.

The Prime Minister’s Big Society advisor, Lord (Nat) Wei – and a founder of the Big Society Network, who had stood down as its Chair to take up his governmental role – had asked Nesta to fund BSN. Nesta was an Non Departmental Public Body at this time (now it is a charity) and reported to the Department for Business. Liam Black, who was a trustee of Nesta at the time, has stated very clearly that the request may not have come as a diktat in a written memo, but he still described it as being ‘forced’ to fund them.

The PM launched Big Society Network at Downing Street.

He has though been (un)surprisingly quiet on its fall from grace or his own role in the affair.

Steve Moore, the former CEO of the Big Society Network, has published his own take on the affair – having been somewhat quiet over recent months. He suggests Shadow Charities Minister Lisa Nandy and publications such as Civil Society News are wrong to focus on the role of the Prime Minister in decisions about funding for BSN. Moore suggests that their claims of the PM being involved are ‘absurd’ and concludes that “Politics may have contributed…more to the demise of Society Network Foundation than they ever did to its life”.

Hmmmm…

Certainly the questions surrounding the Big Society Network have become political, but I would suggest things became politicised the day David Cameron chose to personally launch it at No.10, having appointed one of its founders as his Big Society Advisor and giving him a Peerage.

BSN’s CEO at the time, Paul Twivy, is quoted in the No. 10 official press release as saying:

“The Big Society network will be an independently-funded and run voice of the citizen, enabler of the citizen and partner to government.”

That description sounds rather ridiculous in hindsight.

At its launch, the Prime Minister said BSN would be “an organisation that brings all the elements of the Big Society together”. Ironically in light of its demise, I suspect that statement might be something that even Big Society’s fiercest critics might find themselves agreeing with.

Charity Commission critical of Big Society Network trustees

The Charity Commission recently published the report on its investigation into the Big Society Network charity, Society Network Foundation. You may remember (how could you forget if you read this blog!?) that that investigation arose over questions asked about the Charity’s actions over funding received from the Cabinet Office and suggestions of impropriety of payments made to trustees.

Their report won’t take long to read…and I suspect it took about the same time to carry out the investigation. In summary it says that the payments to a trustee were made prior to the charity becoming operational and that they ceased when the charity started properly running.

This is interesting as of course the Big Society Network was set up some time before the Society Network Foundation was established as a charity. BSN was set up as a for-profit venture. Only latterly (perhaps in order to access funds only available to charities?) was SNF established and, I believe, BSN then became a wholly owned subsidiary of the new charity.

So whilst the Charity Commission are undoubtedly correct in their assessment, the payments probably do not pre-date the operations of BSN. Of course the actions of a private company are beyond the remit of the Charity Commission and there is nothing illegal with payments being made to company directors in this way…but it doesn’t feel quite right to me, even if it is legal.

The second matter the Commission investigated was whether the SNF trustees inappropriately used restricted funding (that is money which is given for a specific purpose and cannot be used for anything else). This relates to a Cabinet Office grant which was awarded to support their failed ‘Get In’ project which never saw the light of day. The allegation was that SFN’s trustees allowed this money to be used for ‘general purposes’, rather than spending it on the project. On this matter the Charity Commission say that they can’t tell whether the Cabinet Office agreed to this money being used in this way, though they do note that the Cabinet Office ‘takes a different view’ of the matter. The Cabinet Office have said they are seeking to recoup a whopping 1.5% of the money they gave to SNF for the project.

In a classic piece of fence-sitting the Commission conclude that this is a matter between the Cabinet Office and SFN which ‘lies outside our jurisdiction’. In a blog post a few weeks ago I suggested that we should expect:

“…a continuation of the ‘he said….she said’ mud-slinging between the former allies as they seek to absolve themselves of any blame.”

Sadly it seems that the Charity Commission were unwilling to referee the mud-fight.

I’m not a lawyer, but it does occur to me that the burden of proof should rest with the party claiming that something changed. There’s clearly evidence that the grant was made as ‘restricted funds’. But there is no evidence to show that this was changed. SNF say that the agreement was provided verbally.
The Charity Commission do criticise the trustees over spending the money on general purposes with only verbal authority. But I am surprised that a lack of evidence that the Cabinet Office agreed to the change has not led the Charity Commission to conclude that SNF had breached charity law.

Since the Society Network Foundation Charity is now being wound up the Charity Commission concluded that it wasn’t worth pursuing the matter any further.

However, one thing occurs to me…There is a test that is supposed to be applied to people who run or work for charities which was introduced under the Finance Act 2010. The ‘fit and proper persons test’ is supposed to prevent ‘fraudulent or sham charities’. Are there not questions to be asked about the suitability of the people involved in this affair over whether they are ‘fit and proper persons’?

Just a thought…

Big Society scandal made simple

As the National Audit Office (NAO) launches a second investigation into government funding of the Big Society Network, I decided to offer up a simple guide to what’s what and who’s who in the rise and fall and fall again of David Cameron’s ‘big idea’…

David Cameron launches ‘the Big Society’ as his ‘big idea’ in the run-up to the 2010 General Election. Communities will be given the opportunity to step up and realise their ambitions for their areas. Met by general bemusement and confusion by the general public, commentators and policy geeks offer up their own views on what it means. My own take, at the time, was to describe it as ‘something old, something new, something borrowed, something blue’. The jury remains out over whether Big Society is anything more than a way to bring about massive cuts to public services.

Big Society Network (a for-profit company) is established as an independent organisation with the aim of realising the Government’s Big Society aims. BSN’s independence doesn’t prevent the Prime Minister hosting their launch. The Society Network Foundation is set up as a charity and the parent body of the BSN.

Ministers and their advisors, such as Big Society ambassador, Nat Wei (who is soon made a Lord for his trouble) go into overdrive with public bodies and funders to ‘encourage’ them to put money into the ‘independent’ organisation. An offer that’s simply ‘too good to refuse’ a number of funders including the Big Lottery Fund, the Cabinet Office and Nesta oblige with grants of more than £2m.

Despite the huge investment to an organisation with no track record of doing anything, Big Society Network’s flagship project – Your Square Mile – fails short of the 1 million volunteers they said they would recruit, by some 999,936.

Prompted by questions from the Shadow Charities Minister, Gareth Thomas MP and constant murmurings within the not for profit sector, the National Audit Office launch an investigation into whether grants made by the Big Lottery Fund (BIG) and the Cabinet Office breached their own rules and procedures.

They find that although procedures had been followed (though one wonders whether these procedures were actually fit for purpose) the Cabinet Office had interfered in the administration of the Social Action Fund that it had out-sourced to Social Investment Business (SIB). The Cabinet Office had instructed SIB to ‘look again’ at the BSN’s funding proposal – until they got the ‘right answer’ – and even changed the eligibility criteria, to make sure they weren’t excluded.

Clearly advocating the Samuel Beckett school of grant making – Try again, fail again, fail better. BIG managed to completely overlook the fact that BSN had failed spectacularly to deliver on the first project they had funded, and unperturbed they decided to award them another grant.

Both the Cabinet Office and BIG deny any wrong-doing and remain bullish in defending their actions.

In response to my blog on the NAO report, former Nesta trustee Liam Black announced on twitter that they had been ‘forced’ to fund the Big Society Network. Nesta deny any wrong doing (are you sensing a pattern here?)…but there’s no disputing the money they put in.

New Shadow Charities Minister Lisa Nandy continues to ask questions and presses the government over the affair and the national press picks up the story (offering up an ‘exclusive’ which stretches the term somewhat, since the story had been covered not just by me, but by Civil Society magazine and others…but hey ho). The Charity Commission confirms that they are looking into the dealings of the Society Network Foundation.

The government announces that they are seeking to recoup £34,000 of funds given to Big Society Network – that’s less than 1.5% of the money they’d been given! Questions are asked whether this grand gesture is more than a not-so-subtle diversion from their own role in the affair.

The trustees of Society Network Foundation issue a statement on their website defending themselves over accusations of impropriety. Two weeks later they decide to throw in the towel and trustees initiate proceedings to wind up the beleaguered charity.

Nesta chief executive Geoff Mulgan (who was not at the organisation at the time of their awards to BSN) launches an investigation into their own conduct in the affair. His report makes clear that Government Ministers and Special Advisors did ask Nesta to support BSN but found no evidence that they were ‘forced’ to do so. But he does acknowledge that “NESTA clearly did not want to antagonise a recently elected government by refusing any involvement in projects linked to its flagship Big Society programme”. You can interpret that as you like.

Later, after Geoff had joined Nesta as CEO, the Big Society Network came knocking again. This time they were not given any money.

The NAO announces that they are launching a second inquiry into the affair to see whether the issues they found in their first investigation were indicative of wider systemic failures.

Meanwhile Ministers remain quiet on the subject. David Cameron appears to have lost the appetite for talking about his big idea (despite former Tory speech writer Danny Kruger’s suggestion he should ‘start proclaiming’ about it again).

And that is the story of the rise and fall and fall again of the Big Society and its leading advocates.

Government seeks to deflect attention over Big Society Network role

On Friday the Independent reported that the government is seeking to recoup around £34,000 of funds given to the Big Society Network, following growing accusations of impropriety. On the face of it this has to be a good thing and if any public money has been misused then it is appropriate that every effort is made to recoup taxpayer’s money. However, whilst £34,000 might sound impressive, it’s less than 1.5% of the money that Big Society Network (and its parent charity Society Network Foundation) were awarded by public bodies including the Cabinet Office, Nesta and the Big Lottery Fund.

Suddenly the figures don’t sound quite so impressive do they? More of a gesture than anything else.

Or perhaps, if you were a cynically-minded person, you might wonder whether this was actually more of a deliberate attempt to deflect attention away from the government onto the Big Society Network.

Charity Minister, Brooks Newmark’s public admission that the government were trying to claw back this money puts the spotlight firmly on the trustees of the Big Society Network. It distracts us from focussing on the real issue at hand, which is why did the government see fit to directly award, or strong-arm others to make grants totalling more than £2.5m to an organisation with no track record to support half-baked proposals that promised the earth but delivered nothing?

We have still had no answer to questions about the role that Ministers and senior officials played in the grants being awarded. Why did former Nesta trustee, Liam Black, say that the organisation was ‘forced’ to fund BSN? If the senior Cabinet Office official quoted by the Independent who says they were told to “…go back and make it [the BSN application] work’ is correct, who was giving the instructions?

BSN’s trustees have responded by saying that the use of funds for the Get In project, which never saw the light of day, to support their other work had been sanctioned by the Cabinet Office. If that’s the case then there’s no prospect of any money being recouped (and I personally do not believe any money will be recouped) and eyes will – rightly – turn back to the Cabinet Office for agreeing to spend the money this way.

I feel there is little prospect of the truth emerging from the Cabinet Office. Governments have a knack of keeping things murky when there’s embarrassing information to disclose (WMD anyone?). More likely is a continuation of the ‘he said….she said’ mud-slinging between the former allies as they seek to absolve themselves of any blame.

More likely to shed light on the affair is the ongoing Charity Commission investigation into whether BSN acted in accordance with Charity Law. If they did spend funds restricted to the Get In project to fund their general activity without permission, then they would be in breach of Charity Law and the consequences are serious. If the trustees can prove they had permission to vary the terms of the funding, as they claim, then the Cabinet Office’s pursuit of BSN might be considered harassment. At the very least, it would be deliberate waste of public funds (no doubt the legal costs and time wasted pursuing the claim will exceed the £34,000 they’re seeking).

It would then be fair to suggest that their actions were a deliberate attempt to place the blame on the Big Society Network for their own failings.

Big Society Network throw in the towel but the story must not end here

The Independent today reported that the trustees of the beleaguered Society Foundation Network (which ran the Big Society Network) have begun proceedings to wind up the charity. The company will also be wound up. (In case you’re wondering… Big Society Network was set up as a company, not a charity – as that was further evidence that Big Society was not more of the same old charities, it didn’t matter if you were a privately owned company you could still do good…. and turn a profit).

It’s not particularly surprising that the trustees have decided to call it a day. They’ve been under the microscope for some time now – after a period of some years when no one wanted to listen to the questions emanating from some charity sector leaders – and the questions are not going away. Unlike of course, the money, which has all gone…apart from that which has been ‘saved’ by funders who finally (FINALLY!??!) decided to withdraw their grant.

The Charity Commission have said that their investigation will continue. It is apparently an ‘operational compliance’ case…which is not a particularly serious inquiry, so don’t hold your breath there. And so the trustees – who may well have been good intentioned – disappear until, no doubt, we see them re-appear magically re-invented in some other guise. And the whole sordid, sorry affair disappears (like that £2.5m again!)

But, as I’ve said before, I feel that the Big Society Network are not the real story here. We have heard nothing about the role that the Prime Minister and Cabinet Office Ministers, Nick Hurd and Francis Maude, played in decisions to fund BSN.

The Big Society Network may have been naïve, arrogant, self-important and even megalomaniacal, but they were only making the most of an opportunity which was presented to them. If decisions had not been made at the notionally independent funders – Nesta, BIG Lottery Fund and Social Investment Business – to support BSN then there would have been no issue here.

So, the questions which Parliament and the NAO really ought to be investingating is who made these decisions?

Did Ministers pressure funders into supporting BSN? Clearly Liam Black, who was a trustee of Nesta at the time, has said they were ‘forced’ to fund them.

The official lines from BIG, Nesta and the Cabinet Office has all been that there was nothing untoward going on and these decisions were all above board. Well they would say that wouldn’t they?

Whichever way you look at it, some absolutely appalling decisions have been taken and – since this is public money – someone should be held accountable for those decisions.

I am still firmly of the view that there are Ministerial fingerprints all over this. I’ve seen enough of Whitehall up close to know how the machine works and it seems implausible to me that these things happened without Ministerial oversight at the very least. To take one example, I cannot believe that the request made to Social Investment Business to ‘look again’ at BSN’s application for funding and the instruction to change the eligibility criteria would have happened without Ministerial sign off.

If Ministers want to fund disastrous vanity projects – and let’s face it lots of them do – then that is actually their prerogative and we can judge them for it at the next election. What I really object to is them doing so secretly in an underhand way, and in wasting everyone else’s time by creating a completely unequal playing field. Think how many charities and community groups applied to these funders for grants only to be rejected as the pot had already been licked clean by BSN? Now think of the hours spent on each application they submitted?

It’s a lot of waste of precious charitable time and money. Waste that could have been prevented if Ministers had just come out and said ‘we don’t like any of you existing charities and community groups, we want private companies like BSN to deliver social good now’.

 

Millions more wasted on Big Society vanity

I mentioned last week that whilst we were on the subject of the government’s role in grants to Big Society Network, we might also want to look at their approach to the National Citizen Service (NCS) programme. The millions of pounds wasted on the NCS makes the grants to Big Society Network look like loose change from the petty cash.

This is the cornerstone of the Cabinet Office’s support for Big Society, with £62m – more than half their annual budget – going to support it in 2012-13. The programme aims to encourage 16 and 17 year olds to “take part in social action projects and build skills for work and life“. There’s nothing wrong with that aim, in fact I think it’s a hugely important part of supporting citizenship among our young adults.

What concerns me, much like the misguided approach to supporting the Big Society Network, is that they have deliberately and knowingly completely disregarded the existing work that’s already going on. Needless to say this fixation to ignore anything ‘not invented here’ is hugely inefficient and ridiculously expensive – at a time when the government have been slashing public spending and calling for increased efficiency in the public sector.

Let’s take a look at the figures from the evaluation of the NCS pilots, which were the basis for massively scaling up the programme:

In 2012 NCS involved 26,000 young people who donated a total of just over 380,000 volunteer hours. If we (generously) disregard the £25.7m which was spent on upfront set-up costs and only concern ourselves with the £36m spend on grants to run the programme, this equates to a cost per participant of over £1,500, or £53.84 per hour of volunteering.

NCS calculate – for simplicity’s sake – the value of this volunteering at minimum wage, giving a total figure of £1.4m of donated time. The Return on Investment is -96.22%. That is to say that almost all of the cost of the programme is unmet by the value of the time donated.

Now that is too simplistic and I do not for one second believe that programmes with social outcomes should be judged solely on the basis of financial return. But lets compare the NCS figures with another programme which, though not exactly the same is broadly comparable. The Giving Nation programme that the Citizenship Foundation have been running for a number of years. Giving Nation works in schools to “get students actively involved in charitable giving and social action”.

Clearly only working in schools is a key difference with NCS, but both programmes have broadly comparable aims.

Giving Nation worked with 76,000 young people in 2012, almost 3 times the number that participated in NCS. And whilst the number of volunteering hours donated through Giving Nation was lower (356,000 compared with 380,435) it cost just over 10% of the NCS budget.

The cost per participant for Giving Nation was just over £5 compared with over £1,500 for NCS. And using exactly the same method to calculate return on investment, Giving Nation comes in at 232% – that is £23 of benefit for every £1 spent. NCS, to remind you, had a net cost of around £1,500 per participant.

Remember that these figures don’t include the development costs – over £25m – that have gone into setting NCS up.

NCS has its place. It works in a different way and in different settings to the Giving Nation and I believe they can both be part of the landscape of supporting citizenship education and practice. What’s completely unacceptable is the imbalance between the levels of funding going into them.

The Citizenship Foundation had been a strategic partner of the Cabinet Office for some years and prior to 2010 public money had already been invested in building the infrastructure that underpins Giving Nation.

But rather than continue investing in them (and many others who have similar track record of delivering this type of activity) the Coalition chose to wipe the slate clean and waste millions and millions of pounds of public money.

As public services are cut left right and centre – not least youth services which have been decimated since 2010 – perhaps a government so fond of increased public sector efficiency should take a long hard look at its own practice. The NCS is yet another example of Ministers willingness to waste millions of pounds of public money on programmes simply so that they can call them their own.