Dormant Accounts Fund for Northern Ireland - NICVA's Response to the Consultation Framework

Introduction

NICVA's response to this consultation has been shaped and  informed by a consultation event with the  voluntary, community and social enterprise (VCSE) sector, held at NICVA on 9th December 2019. A diverse range of VCSE representatives attended and had the opportunity to directly share their views on how the fund might have maximum impact. Kate Beggs, Northern Ireland Director for the National Lottery Community Fund was also in attendance at the event to hear representatives’ views directly.

Under the direction of the Department of Finance the National Lottery Community Fund  has been tasked to deliver The Dormant Accounts Fund in Northern Ireland. Around £16 million of Dormant Accounts funding for Northern Ireland has accrued over the last 10 years and it is anticipated that money will continue to be available on an annual basis.The Department of Finance has determined that this funding should benefit the Northern Ireland voluntary, community and social enterprise sector by helping grow its resilience, increasing capacity and encouraging sustainability.The National Lottery Community Fund  have been formally engaging with the VCSE sector to determine how the funding can best be delivered, with a view to opening the fund in early 2020.

Our Response

NICVA welcomes the developments towards delivery of a Dormant Accounts Fund for Northern Ireland and via the funding priorities identified by the Department of Finance some recognition of the very real challenges being faced by the VCSE sector regarding its continued capacity and sustainability.

Our response focuses on those key questions posed in the Consultation Framework  document issued by The National Lottery Community Fund NI namely:

‘How can we Build Capacity and Improve Sustainability within the VCSE sector; What are some of the key issues and challenges in doing so; and How could Dormant Accounts funding practically support the sector in addressing these challenges?’

Key messages from our response included:

1. Issues and Challenges Affecting the VCSE Sector

Funding Cuts and Uncertainty

VCSE organisations are finding themselves in an increasingly unpredictable economic environment with reductions in both funding and public donations. This continues to threaten the financial viability of VCSE organisations as they are simultaneously being asked to do more with less whilst adapting to increasing levels of regulation and bureaucracy. This has been compounded by a lack of certainty and late decisions around funding, alongside this is the financial uncertainty as to the impact, post-Brexit of the loss, of EU funding.

The Wider Funding Environment, Government Policy and Direction

Issues include challenging short term and outcome-based funding models; an absence of core funding; increased bureaucracy and duplication. There is a need for greater flexibility in funding and for stronger communication and collaboration across funders (both public and charitable) and between funders and VCSE organisations.

The impact of the move towards procurement and a contract culture by government and public sector agencies has created real difficulties both in terms of administrative and business demands and challenges and in the creation of a ‘culture of competition’ that is felt can stifle innovation and collaboration opportunities.

Continued cuts to public budgets and programmes have also increased demand and expectations on the VSCE sector, further impacted by changes in government policy direction such as Welfare Reform.

Lack of investment and recognition of essential core costs

As access to core funding is generally not available, this presents significant problems for organisations in terms of how to resource important activities such as business development, communications and networking, and the administrative burden created by bureaucratic funding and reporting requirements. These challenges in securing funding to meet essential business costs can inhibit innovation and the capacity for organisations to grow and look to the future and puts often unacceptable pressures on VCSE sector staffing models and service delivery.

Stakeholder Relationships

There are growing challenges for the VCSE sector regarding managing stakeholder relationships. In terms of relationships with the public sector this includes tension between maintaining a critical and challenge function, versus tendering for and delivering services on behalf of the public sector and in improving opportunities to work more collaboratively with policy makers on influencing strategy and service design.

Regarding independent and charitable funders, there is also a need for better communication and connection, and to recognise the challenges of time limited and restrictive funding criteria (e.g.  access to capital or core costs) for the VCSE sector.

Collaboration and partnership working

VSCE organisations recognise the benefits of collaboration and partnership working at all levels, however, a culture of competition, created by increasing tendering and procurement and demands on funding can hinder collaboration. In addition, recognition of the time and resources required for VCSE organisations to genuinely explore or progress such opportunities is required.

Income generation and Fundraising support

There is greater  support needed  for VCSE organisations to respond and adapt to the changing funding landscape, including increasing awareness, knowledge and understanding of the different social investment and finance options available, as well as the other skills needed to translate vision and good ideas into action.

There is an acknowledgement that social enterprise and other new business models are not an appropriate solution for many organisations and there remains a role for funders in supporting core costs.

Strategic planning, governance and leadership

It can be increasingly difficult for small to medium sized organisations to invest in and resource governance improvements.  In addition, the challenge of how to build a more resilient VSCE sector requires access to and investment in building strong leadership across the VCSE sector and increased opportunities to support and sustain leadership development.

Investment in staffing and volunteering

The VCSE sector is becoming increasingly overstretched. It faces significant difficulties in attracting and retaining a suitable workforce due to the impact of sustained funding cuts, issues of lower pay and conditions and difficulties for organisations of all sizes in prioritising and resourcing staff training and development. The VCSE sector also faces real challenges in both attracting and retaining volunteers and requires support to strengthen its volunteer bases.

Digital skills and communication

Digital technology developments, in terms of how they are changing issues for both the sectors service users and the workplace environment presents both real challenges and opportunities for the VCSE sector in terms of capacity and sustainability.

There is a need to build the digital knowledge and skills of VCSE organisations not only to better respond to digital and emerging technologies, but also to help the VCSE sector inform or influence this unfolding 4th Industrial revolution.

There are also wider challenges for the whole VCSE sector in capturing or articulating the richness and breadth of its work, and the difference it makes.

2. Suggested Priorities for Delivery of the Dormant Accounts Fund NI

Whilst welcomed, the Dormant Accounts scheme provides a limited pot of money and therefore should be directed towards initiatives that can have the greatest impact across and throughout the sector.

NICVA recommends priority is given to those areas that are typically difficult for organisations to attract resourcing and financial support for and which our consultation highlighted as posing significant gaps or challenges.

In summary this should include initiatives linked to:

1. Strategic planning and governance
2. Income generation and Fundraising support
3. Workforce development, to include Volunteer Development
4. Collaboration, networking and partnership working
5. Digital skills and Communications
6. Environmental Impact & Sustainability

3. Recommendations regarding the administration and delivery of the Dormant Accounts Fund:

• In terms of the administration and delivery of the Dormant Accounts scheme we recommend flexibility reflective of the VCSE sectors diversity regarding how funding is made available, in terms of grant size, timeframe for delivery etc.
• There is a need to explore various funding models and to utilise existing networks to help the Dormant Accounts fund in achieving its aim to support a resilient and sustainable sector. There is a need to ensure the correct balance between direct support for smaller organisations and maximising the benefits of collective or regional support networks.
• In terms of eligibility criteria for Dormant Accounts funding, we agree with the emphasis on projects and initiatives being able to demonstrate lasting impact for their organisations, their beneficiaries and society, whilst also creating opportunities for shared learning or innovation across the sector. However, criteria should be sufficiently flexible to ensure organisations are not penalised as a result of being smaller in scale or reach.
• As the Dormant Accounts scheme moves towards delivery and distribution of funding it must ensure equity and accessibility regarding application processes reflective of the diverse makeup of the sector in terms of its differing levels of capacity, governance structures etc.
• In terms of managing expectations and demand for funding, transparency and continued engagement with the VCSE sector by the National Lottery Community Fund would be considered important as the scheme develops further.
• We look forward to further clarity and information from the National Lottery Community Fund regarding the scale of funding to be made available via the Dormant Accounts scheme.

Closing Comments

We hope our response can help meaningfully inform the delivery of the Dormant Accounts scheme in Northern Ireland so that it’s  reach, and impact can be optimised.

We recognise that some of those issues raised via the National Lottery Community Fund consultation fall outside of the scope and remit of the Dormant Accounts scheme and that the scheme is limited regarding its capacity to address the full scale of issues identified. However, we believe the key messages generated via this  consultation should not be lost and provide a unique opportunity to highlight current issues at a strategic level with relevant government departments and agencies.

As the National Lottery Community Fund continues in its development and delivery of a Dormant Accounts scheme for Northern Ireland, NICVA would welcome continued opportunities to support and inform this work.

To view NICVA's response in full, please see our consultation response document attached.

If you have any questions about NICVA's response to this consultation, please contact Kathy Maguire [email protected] from our  Policy and Public Affairs Team.