Can they cut my funding?

q&a imageThe short answer is, yes they can.

If the government feels the effective use of public money is at risk, withdrawing funding or terminating a contract early is a reasonable action to take. Fortunately, though, these decisions cannot be taken lightly.

The Compact outlines agreed good practice for both sectors when entering into or concluding a financial relationship. In knowing these commitments, you can ensure any decision made is a fair one.

First, before entering into a funding agreement, you should have agreed the terms of delivery and what actions will be taken if you fail to deliver.

If you are struggling to meet your targets, inform your funder as soon as practicable. It should make a concerted effort to assist you in overcoming the barriers preventing you from delivering these outcomes.

Similarly, if your funder envisages any future resource constraints, the Compact stresses the need for it to notify you at an early stage and to work with you to tackle difficulties.

If these efforts are unsuccessful, your funder should notify you as soon as possible that it intends to conclude the arrangement, with three months’ notice being the minimum. The notice should include clear reasons for ending or changing the funding and provide enough detail for you to respond. Don’t be afraid to challenge this decision.

If your funding is coming to an end as a result of a review of strategic or development funding, the steps above still apply. In addition, you should ask yourself ‘Did they consult me?’. The Compact stresses the need for government to consult the sector on issues that are likely to affect it.

Further to this, if your organisation provides services for equalities groups, the public body should complete an Equalities Impact Assessment. This will ensure that the change in policy or procedure fulfils the requirements of anti-discrimination and equalities legislation, and also meets the needs of the community.

See more of our resources about handling cuts to funding.

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