Specific issues: organisation of Groundwork trusts
Groundwork trusts are a result of government policy towards promoting urban renewal and post-industrial renewal. Rather than see such work as being solely the responsibility of local authorities, the objective is to encourage partnerships between local communities, local businesses and national government.
The individual trusts are separate legal entities. They are companies limited by guarantee. The members or trustees of the trusts who control and guarantee the trusts activities will usually include representatives of business, local government and a nominee from Groundwork UK.
Groundwork UK is not designed to be a head office, but rather a co-ordinator and national voice for the autonomous local trusts. It is representative of and accountable to the trusts.
Groundwork UK is under very strict control from the Department for the Environment, Food and Rural Affairs (DEFRA).It has to get prior approval for all large expenditure, its staff members are on civil service pay scales and some of its senior officers are on secondment from government departments.
All the trusts get considerable amounts of central government funding. However, it is important to note that neither the trusts nor Groundwork UK were set up by specific legislation.
The role of Groundwork UK
There is a specified contractual relationship between Groundwork UK and each trust. This is referred to as “Partnership Agreement”. Groundwork UK issues this contract after agreement with DEFRA. Groundwork UK acts as the management of the network of trusts.
The contract is based upon the delivery of services, which the individual trust has lodged with Groundwork UK within its annual business plan. The business plan is effectively a bid for funding specific projects which the individual trust has identified. Groundwork UK acts as an agent for DEFRA. It examines the bid and verifies it to ensure that it complies with regulations.
Groundwork UK also co-ordinates the government’s funding of the trusts. Each year a Public Expenditure Survey estimate is prepared for future years and a funding request submitted for the next year’s work.
This is accompanied by a Groundwork Plan which describes the main priorities and objectives for the trusts collectively over the coming year. This document is compiled by summarising and collating individual plans that are submitted by each individual trust.
Each individual trust is autonomous, and will have been created to respond to differing local circumstances. There is no standard trust. Each undertakes very different types of project and their individual funding profile reflects this.
The only common aspect is that each trust undertakes work that is designed to improve ‘Groundwork’, that is the environment in the wider sense. This includes the physical environment in which local communities to the trusts are based. In doing this they also devote resources to community involvement and environmental education.
Whilst autonomous in nature and in terms of its management, each trust must submit copies of its audited accounts to Groundwork UK. The auditors must be satisfied that all public money has been spent properly. Also each trust has to maintain and comply with specific rules set by DEFRA and monitored by Groundwork UK.
Funding allocated by Groundwork UK to trusts
A large part of the funding for any trust comes centrally from Groundwork UK. The source of this money is variable, the most likely being DEFRA funding, lottery money and sponsorship.
DEFRA gives sizeable sums of funds which are allocated through Groundwork UK. The latter does have discretion over the sums paid to individual Trusts and is able to reallocate the money from trust to trust.
Groundwork UK is accountable to DEFRA for the use of the funds. It is not possible, for example, to use the money to support ‘heritage’ projects. In practice DEFRA is involved in agreeing what type of projects Groundwork UK will fund at the start of the year. This will influence the plans of the local trusts.
Individual trusts are required to bid for DEFRA funds. Normally this is on a matching basis. This means they need to have got at least an equal amount of private, European or local authority money before the DEFRA funds are released to them.
Trusts are prohibited from receiving double funding from more than one source of Exchequer funds which includes:
- Single Regeneration Budget funding;
- English Partnership funding;
- Environmental Agency funding.
Groundwork UK also plays a big role in arranging commercial sponsorship of projects. Rather than dealing with individual trusts a company may decide to enter into an agreement with Groundwork UK centrally and provide funds for a national or regional project, for example canal clearance.
Groundwork UK will then allocate the funds to trusts who can undertake such work. As is common with sponsorship, there are likely to be contractual requirements to display the sponsor’s logo or company details.
All funding allocated by Groundwork UK to trusts is provided solely for the development and promotion of programmes, projects or phases of projects necessary for the trusts to deliver their agreed business plan objectives.
The colloquial shorthand which trusts may use to describe a funding arrangement, for example the term ‘core funding’, can lead to confusion. In practice, trusts apportion all general expenditure such as estate costs or general administration costs and allocate it between projects. In this way all central funding flowing to the trusts from Groundwork UK is claimed as Programme and Development Funding (PDF) and is geared to specific projects.
Trusts may receive funds for projects from a variety of sources outside Groundwork UK. These are likely to include funds from the following:
- Local Authorities - through grants or other payments;
- National Lottery Money - the exact nature of this funding depends on the project;
- European Funds (Regional Development Funds) - most but not all trusts are in areas that are eligible to receive European funding of this type;
- English Partnerships - this is a government agency which may fund certain types of project;
- Landfill tax credit scheme (see VBNB43500);
- The Countryside Commission - although Groundwork UK was established to centrally administer such funds there are occasional instances when money is paid directly to individual trusts;
- Commercial sponsors - local sponsorship paid direct to the individual trust;
- Landowners - contributions towards the cost of the project/charges for work done on their land.
Additionally, some trusts have developed trading activities through a wholly owned subsidiary or through an associate company to provide environmental business services with small and medium sized business.
Trusts are also obliged to promote local involvement in conjunction with local organisations and many are now providing training. Some trusts and their trading subsidiaries are participating in “New Deal” initiatives.
In most cases funding is provided solely for the development and promotion of programmes of projects or phases of projects necessary for the trusts to deliver their agreed business plan objectives.