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January 11, 2017

New funding – but there’s a glitch

Some major new European funding programmes were launched last week by Scottish Government’s Third Sector Unit. The £9.7m Social Economy Development Programme is comprised of the Social Economy Growth Fund and the Social Innovation Challenge Fund. The closing date for the first round of applications is 17th February. These ESF funds will run alongside and compliment an additional ESF fund – the £18.9 Aspiring Communities Fund – to be launched later this month.  While this new funding is very welcome, SCA and other third sector stakeholders are concerned as to the practicability of the scheme and about one aspect in particular.




Cost Models and reporting- “staff have to be employed 100% on the project”.

Third sector stakeholders have identified a serious flaw in the design of the proposed ESF programmes. These concerns are centred on a rule that SG have unilaterally determined (this is NOT an EU requirement) and which states that staffing costs must be allocated on the basis of 100% for any worker identified as working on the ESF project. In other words, any worker involved in an ESF funded project has to commit ALL of their time to that project.  SCVO, Social Firms Scotland, Senscot, Scottish Community Alliance and CEMVO consider this requirement to be wholly impractical for a number of reasons:

a.            In practice, any third sector organisation would typically seek to apportion costs across those members of staff who are likely to have some, but not exclusive, involvement with the project as it progresses. At a minimum, some management time and some administrative back up would be required to make any project effectively operational. More likely, other project staff would also have some involvement. The 100% rule effectively excludes all of this part-time, but nonetheless critically important, involvement of existing staff in the ESF funded project. Third sector organisations are familiar with previous EU requirements to maintain timesheets in order to reflect the apportionment of time expended on the project. There is no mention of timesheets in the reporting requirements for this programme presumably because on the assumption that the 100% rule will be implemented.

b.            Innovation and creativity have been identified as a central theme of the social economy programmes. The 100% rule excludes the possibility of drawing upon the existing expertise and knowledge-base of the organisation’s existing staff group and as such, given that it will be deprived of this resource, diminishes the chances of achieving these desired outcomes.

c.             The funding levels set in the Social Innovation Challenge Fund are insufficient if the 100% rule is to be applied (unless it has been assumed that the staffing input is to be very short term and part time in nature).

d.            The desired outcome of growing the capacity of the sector will be undermined by the application of this rule. 100% funding of staff can only produce a number of short term, stand-alone projects that will be impossible to sustain or integrate into the mainstream operation of the applicant organisation when the funding ends.

e.            In order to engage in the programme, third sector organisations will be forced into either recruiting new staff externally or transferring existing staff and backfilling temporary internal vacancies. Both of which are inefficient and fail to capitalise on the internal skills and capacity of the organisation.