By Jack Perschke, Partner at Netcompany
With the UK’s exit from the EU, the Government has a golden opportunity to re-think how grant funding can better support policy, while also increasing its effectiveness and reducing loss from fraud. But big challenges remain from grant management platforms stuck in the 1950s.
At its very heart, the business of government is mostly about either taking in money or giving it away. Of course, that’s a simplified view grant management is a large, important and complex area of government. Its raison d’être is to support policy objectives across government from education, health, rural affairs, innovation and research as well as abroad through international aid for public good.
Adopting prevention strategies to minimise long-term risk
At present many government departments simply do not possess the necessary technology, time and employee availability to action the plethora of grants available. Not only that, a number of departments may be incorrectly actioning grants and creating more complicated matters further down the line during an audit, such as revealing that expenses were not accounted for. With these hidden costs not factored into the process from the get go, there could be an increasing chance that the spending will not be reimbursed.
Grant management requires both process flexibility and mandatory security and monitoring to ensure safe case management and the payment of grants. And while the funding mechanisms, rules and scopes may differ, grant management is something nearly every department of every government does. The challenges are familiar across governments too – with the need to improve the efficiency of grants administration, the effectiveness of the grant funding and reduction in losses from fraud driving innovation.
Grant management following exit from the EU
While the Grants Management Function in the Cabinet Office is continuing with its ambitions to make grant management more effective efficient and safe, the UK’s exit from the EU is ensuring that grant management is rising up the agenda across many other departments as they re-think how grant funding can better support policy.
For farming in particular, the end of EU farm subsidies represents one of the biggest changes to farming policy in half a century. With the end of the Common Agricultural Policy (CAP), Defra will assume responsibility for designing, implementing and managing its own domestic agricultural policies and schemes. And is now starting its 7-year transition towards a system that pays farmers to improve the environment, improve animal health and welfare, and reduce carbon emissions.
Essentially, they are moving away from decades-old practices of funding based on land size, to instead reward farmers for work that only they can do – whether that’s ensuring the survival of threatened species or locking up carbon on their land. Work that benefits everyone in society.
This move will have to be both driven by long-term policy, and reactionary to need. Yet, the UK grant management function is underpinned by platforms and processes formed in the 1950s. Platforms that are clunky and rigid, and not realistically up to the job of delivering what government and society wants.
Innovate around proven solutions
If government needs to underpin a reimagined grants management function with a new platform to ensure it meets its ambitions, how should it do that? It could, in the established way, start from scratch and build something that might work. Yet we know projects often fail to deliver on time, exceed the budget, and do not provide the value promised. The alternative is to look at what others are doing. As we said before, the grant management function remains relatively the same from government to government, as do the challenges and aspirations to streamline processes and improve transparency.
With this in mind, wouldn’t it be better to adopt proven solutions that create agile, future-proof systems, based on open components that ensures full flexibility and the opportunity for ongoing innovation? Take this approach and government can spend 20 per cent of the effort getting 80 per cent of the way to the digital national scale grants solution they need. Why should Defra and the like build their own when suppliers have already delivered these proven solutions to other governments?
With little effort government can create a cutting-edge grant management system, own it and be responsible for it, leaving more space to innovate around the edges creating the impetus, through data-led funding and subsidies strategies, to create behaviour changes that will benefit society.