Making Grants Efficiently in the Culture, Media and Sport Sector

Audit Summary

Publication Date:
May 2008

Audit Office:
National Audit Office - UK

Link to full report:
http://www.nao.org.uk/wp-content/uploads/2008/05/0708339.pdf

To assess whether there is scope for grant-makers in the culture, media and sport sector to improve the cost-efficiency of their grant-making processes.

A sample of eight grant programmes that covered a material amount of grant expenditure: a total of £647 million in grant funding, representing over a third of the total £1.8 billion in grant expenditure of the sector in 2006-2007. The programmes also represented a range of different types in terms of the value and volume of grants they distribute and the objectives they set out to meet.

On measuring the costs of grant-making processes:

The grant-makers held little information by which to judge the efficiency of their grant-making. They had not routinely undertaken an analysis of the costs of their processes and the Department and the grant-makers had not agreed common indicators to assess and compare costs or efficiency across the sector.
The cost variations among programmes which had similar features suggest there is more grant-makers could do to understand the differences and identify the relative efficiency of their processes.
For some programmes, more work was needed by the grant-maker to understand where costs fell and to evaluate whether the costs of grant making were proportionate to the outcomes delivered.

On opportunities to improve the cost-efficiency of grant-making:

Practice within and outside the sector demonstrates a number of methods grant-makers have employed to enhance their processes and so reduce the costs of grant-making, both to themselves and to applicants. Key areas include managing the demand for grants, mapping and streamlining processes, and sharing systems or facilities.
There was little evidence that grant-makers had sought to learn from one another by sharing information on the costs and processes of grant-making. There was, however, an established forum for sharing knowledge among the lottery distributors on which the grant-makers could build.

In order to understand their cost of making grants and so identify where they can make efficiency savings, grant-makers should collect information on the costs of grant-making on a consistent basis.
The Department should agree with all grant‑makers a common framework for reporting administration costs.
Grant-makers should identify the scope to increase the efficiency of grant-making by comparing their grant programmes, or elements of them such as the application process, both internally and against similar programmes in other organisations.
Grant-makers should review whether the costs of making grants are proportionate to the size of grants awarded.
Grant-makers should explore how they might estimate the costs to grant applicants of preparing applications and providing information for each grant programme they manage.
The Department should facilitate an initiative across the sector to share information about the administrative costs of grant-making.
Grant-makers should build on each others’ existing work to enhance efficiency by identifying further opportunities to improve their processes.