Democracy Matters phase 2: analysis of responses

6. Funding community decision-making

Participants were asked to consider the resources required for community decision-making bodies to be successful. This included both monetary and non-monetary resources and support. This chapter presents an analysis of comments about how bodies could be funded; this was the focus of Q11 but was also the second most prevalent theme in responses to Q14a about other forms of support. More information about other support requirements is in the next chapter.

Question 11: How do you think community decision-making bodies should be resourced?

Funding from central or local government

The most prevalent view among participants was that new or existing community governance bodies should receive funding from public bodies and central or local government. Some participants representing a range of organisational types suggested public funding, or grants be given to specific community projects. For instance, Glasgow's Empowerment Communities Consortium highlighted around £500,000 of funding was delivered by Glasgow City Council to Development Trusts annually. Others called for a devolved or decentralised funding model, to provide community decision-making bodies with a percentage of government budget streams, such as council tax revenue or money from developers. Participants felt this model would empower communities to make decisions and encourage collaboration between partners.

"Local councils share finance and support with community groups through budgets rather than funding which encourages competition rather than collaboration."– Conversation hosted by Greener Kirkcaldy and Nourish Support Centre

However, several raised challenges in providing public funds in the current climate of service cutbacks and the cost of living crisis. Some shared concerns that this would draw resources from frontline service delivery and further deepen inequalities. Another view expressed by some participants was that funding should be independent of local authorities, as they are already too stretched in resourcing their statutory duties.

The Phase 1 reports were also clear that funding is vital to support any proposed changes.

Yet it was pointed out that budgets for community capacity building were being cut back (leaving more deprived communities less supported), as well as reductions in the kinds of funding and budgets where decision-making could be devolved – and remember this was in 2018, so the financial situation has worsened considerably. And it is one thing to empower communities to take over community halls or other facilities but what happens if they run out of funds – including because the council cuts hit the level of income they expected?" – UNISON Scotland

Concerns were also raised about the limitations of funding provided by local or central government. Participants expressed a view that too many conditions are attached to the funding given to local authorities by the Scottish Government, or to local authority money provided to community organisations. It was suggested that the funder holds the power, which means the resource is not always spent on issues that are local priorities, or in ways which recognise or make the most of other relevant local activity. These were seen as essential reasons for communities to have more freedom over how money which ends up in the community is spent. Other reasons given by participants on why spending decisions should be made locally rather than at a regional or national level included tense relationships between different levels of government and the need for community decision making bodies to have the financial freedom to prioritise community concerns and challenge government decisions.

However, some other participants advocated for control of some or most budgets to remain at higher levels of government, for the reasons of: economies of scale; as a safety net; to avoid fracturing the community where there are contentious budgeting decisions; to protect public services; to enable national redistribution of funds; and to avoid variations in service provision between communities.

"Some groups… suggest funding comes direct from [Scottish Government] to local bodies and bypasses councils completely. This can be read within a setting of current dysfunctional relationships between community groups and councils, with community groups often on the receiving end of cuts, or insecure funding... Some communities feel that they are competing with councils for scarce resources." – DTAS

"Councils should get money to deliver services where economies of scale are desirable, professionalism is necessary, and local/fragmentation is wasteful." – West Lothian Council

Provide adequate funding for community groups

Another prevalent theme raised by participants was the need to provide adequate funding for community groups, or why this was vital. These included to:

• Recognise and cover the costs of the work they already do.
• Attract and retain staff.
• Secure buy-in from community bodies.
• Cover start-up, equipment and technical costs.
• Ensure good governance, promote sustainability, increase capacity and enable organisations to be effective.
• Ensure bodies can promote equal opportunities for participation by, for instance, paying for translators or volunteer expenses.

"Community bodies already run on such limited capacity and when they are not resourced, much of this capacity has to be put towards funding applications. This detracts from the energy that could be put back into the community."– Conversation hosted by Wester Hailes Community Trust

"It must be funded to establish the resource pool needed… If the intention is to open a new "transformative" chapter in 'local democracy', do not make the mistake of thinking that the fanfare can be nurtured by resourcing on the cheap." – Individual

Some expressed a view that without adequate and sustainable funding, any new measures would be perceived as tokenistic, a means of cutting pre-existing services, or would set up community decision-making bodies for failure.

"Changes must not be used to save money by cutting pay and terms and conditions for vital public service workers. Change should be for improved democracy and for improved quality services, not for delivering local services 'on the cheap'." – UNISON Scotland

"There is some cynicism from community organisations that efforts to devolve further decision-making to communities could be exploited by local authorities to facilitate service cuts. If this legislation is about true community empowerment, it is vital that communities are able to access sustainable funding to support such activity, and to meaningfully engage with their wider community." – Volunteer Scotland

"Some consultees expressed concern that new local governance legislation may give community groups new democratic powers, but with no additional resources to manage them… local people would have their expectations raised, but when the newly empowered community groups can't meet them through lack of resources to follow through on aspirations, these groups would get blamed for failure and inaction."– SURF

Other funding sources

Funding through taxation was raised by several participants, including raising current taxes and alternative options. Suggested potential new forms of taxation spanned council tax supplements, local taxes on tourist accommodation, roads and land, community taxes, or wider reform of Scotland's taxation system where local taxes are distributed upwards. However, participants in a conversation hosted by Voluntary Groups Sutherland felt that extra local taxation is likely to be unpopular. Social Enterprise Scotland and The Common Weal also highlighted the need to consider the potential impacts on communities and individuals, particularly those on low incomes, of any taxation changes and to ensure resources are distributed fairly.

"Taking the experience of the 'Local Tax Commission'…(and) create a funding system for local governance based on local collection and retention with a layer of redistribution at the national level…In highly successful European states such as Norway, all taxes are collected by the local authorities and a proportion of that then paid up into central government rather than funding being gifted downwards from a powerful centre." – Electoral Reform Society.

"Requires careful consideration of potential impacts on residents and securing community support. These taxes could be collected across an area that hosts several local communities' groups with these new powers, allowing for wealthy communities to contribute to those struggling economically." – Social Enterprise Scotland

Additional funding sources mentioned by participants included:

• Fundraising events, philanthropy, corporate donations and sponsorship, and grants from funders such as the National Lottery. In a community conversation in Helensburgh participants advocated for better awareness raising of grant opportunities.
• Raising money locally through community benefit trusts, tourism revenue, wind turbines and renewables, credit unions, democratic finance projects, social enterprise projects, or community land ownership schemes. Suggested advantages included enabling the autonomy of community decision-makers and circulating the funds within the community, ensuring the benefits remain local. Again, there were calls to ensure that any monies raised locally are distributed fairly.

"Community benefits from renewables have played a major role in funding the activities of some communities…. Consideration should be given to the remoteness of urban communities, and some rural communities, from these projects and resources, perhaps through contributing a proportion of these funds to (a) national community wealth fund with a formula for distribution that levelled the playing fields, particularly for communities experiencing deprivation." – DTAS

Challenges with, and barriers to, direct fundraising by communities were also outlined. These included objections to the siting of renewable energy generation in local areas, the potential for corruption, and possible conflicts of interest associated with sponsorship or advertising. Social Enterprise Scotland felt this source of funding should only be used to establish community bodies, rather than relied on long-term, to "avoid threatening the democracy that is trying to be established."

Some called for community bodies to be able to draw on a variety of funding sources. They emphasised a bespoke funding approach to take account of the scope and purpose of bodies and local contexts, assets, and needs.

"The resourcing of community decision-making bodies in part depends on the purpose they are serving and the scope of their decision-making. Community decision-making arrangements linked to community benefit funds are resourced through that fund. Similarly, if there was a Citizens Assembly or Community Health Panel linked, for example, to physical and mental health and seeking to improve the delivery of NHS support in the area, that should be funded through the NHS." - Foundation Scotland

Funding models

Some advocated for implementing specific funding models or highlighted problems with current approaches. Sustainable, fair or participatory funding models were called for. Potential issues described by participants included short term and constraint-based funding which would make it difficult for communities to take a long-term view, make best use of resources, attract staff, engage in genuine co-production and relationship building, focus on emergent outcomes. Audit Scotland noted effective community empowerment would require an understanding of how best to focus scarce resources.

"Commit to the principles of Fair Funding… (this) incorporates… longer-term funding of three years or more; Flexible, unrestricted core funding, which enables organisations to provide security, plan effectively, and fulfil good governance requirements; Sustainable funding that includes inflation-based uplifts and full costs, including core operating costs; funding that accommodates paying staff at least the Real Living Wage; accessible, streamlined, proportionate, and consistent approaches to applications and reporting, timely process and payments, and partnership between the funder and fundee," – The CLD Standards Council

"One of the biggest challenges…is short term funding which has to be heavily prescribed (in order to get the funding) which does not allow genuine co-production and relationship building to happen, nor more emergent outcomes which weren't predicted at the very beginning. We have been working with the Ideas Fund to develop more participatory funding models which fund communities directly to lead research (flipping the traditional model) which can be more longer-term, focused on capacity building, and is highly relational." – Conversation hosted by Science Ceilidh

While Ythan Community Council felt funding should be allocated according to population, not perceived needs, others called for budget levels to be based on level of community need or tailored to bodies' reach, activity, and level of responsibility.

"Take account of the circumstances of the community decision-making body. We'd expect

this to mean that areas like north Edinburgh that experiences significant multiple deprivation would receive more than more affluent areas." – R2

Non-monetary resourcing

Many participants suggested non-monetary ways of resourcing community decision-making bodies, which is explored in more detail in the next chapter. However, it was acknowledged that funding needs to be available to pay for much of this other support.

"When capital funding is made available... it doesn't usually have revenue funding attached to pay for administration. Consequently, volunteers must do all the work – monitoring, writing reports etc. This can be an unfair burden on a small community. Likewise, funding is often not sufficiently supported with appropriate expertise… it risks being frittered away on small short-term schemes that are less likely to yield beneficial results than a strategic programme of projects over a longer term." – Conversation hosted by Dumfries & Galloway Cycling

However, a small number of respondents, including Aberdeen City Council and UNISON felt that it was unsustainable to expect local authorities to provide services to community bodies at no cost without any additional funding or highlighted possible detrimental impacts on staff of increased workloads.