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Locally trusted organisations

July 2015

A locally trusted organisation is the organisation chosen by your Big Local partnership to administer and account for the distribution of your funding, and/or deliver activities or services on behalf of the Big Local partnership. 

Your Big Local partnership guides the overall direction of Big Local in your area and makes decisions about how your Big Local funding will be used. You might work with more than one locally trusted organisation. This will depend on your Big Local plan and the skills and resources you need.

We have a funding agreement with your locally trusted organisation(s), and this is the document that is legally binding.

What does your locally trusted organisation(s) do?

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As a minimum your locally trusted organisation must be able to:

  • receive and administer funding on behalf of the Big Local partnership, and in line with the Big Local plan and funding agreement
  • report on the use of funding to you and to us
  • provide grant and partnership administration support
  • have a good working relationship with you and us, and with the Big Local rep
  • pass our due diligence checks which includes being suitably experienced, constituted and able to keep accurate financial records of how the money is being spent
  • agree and sign our funding agreement.

A Big Local partnership is a group of people who together are responsible for guiding the overall direction of Big Local in your area. We don’t expect partnerships to have a bank account, process invoices or deliver lots of activities. This is why we ask you to work with organisations that you trust, that have the appropriate skills and structures in place to do this for you.

However, we know that some Big Local partnerships do deliver some community-based activities; indeed some want to go further and become their own locally trusted organisation. If you are thinking about delivering some activities or becoming your own locally trusted organisation please read our guidance on different approaches to being a Big Local partnership and Big Local partnerships becoming their own locally trusted organisation to find out more.

How to choose a locally trusted organisation

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Most of the Big Local areas have now selected and are working with a locally trusted organisation. We expect Big Local partnerships to choose a locally trusted organisation in an open, fair and transparent way. It’s important that you are able to work with your locally trusted organisation to achieve the vision you have set for the Big Local area.

Who can be a locally trusted organisation?

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Any organisation that meets our criteria can be a locally trusted organisation. Locally trusted organisations in Big Local areas include: housing associations, parish councils, local businesses, charities, voluntary groups, community voluntary services, community foundations, trusts and other funders, community groups, schools, credit unions, churches and a GP surgery.

Due diligence checks

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As part of our assessment, we carry out due diligence checks on your chosen locally trusted organisation(s). As part of this process we check if the organisation: 

  • is constituted and can act as a locally trusted organisation within its objects – we ask for the organisation’s governing documents and contact details
  • has the experience and capability to administer and account for the funding – we ask for the organisation's most recent set of financial accounts and use these to check the organisation’s financial position
  • has the capacity to support the partnership in its role as locally trusted organisation – we ask how the organisation was chosen and the working relationship between you
  • has a bank account in the name of the organisation with at least two signatories who are not related to one another or reside at the same address – we ask for a signed form to show the account and signatory details, as well as a copy of a cheque or paying-in slip as evidence of the account details.

Once we’ve completed our assessment and due diligence checks, we send your locally trusted organisation an offer letter that sets out the amount of funding endorsed, the payment schedule, and the terms and conditions of funding. We send a copy of this to the chair of the Big Local partnership and the Big Local rep. The locally trusted organisation signs the terms and conditions, also known as the funding agreement, to indicate that they agree to them. We release the funding once we receive a signed copy of this agreement. You can see a copy of the standard terms and conditions of funding here.

Once a locally trusted organisation has a funding agreement with us they are obliged to continue in their role under the terms of that agreement for the period of the agreement, unless we (on your behalf) or they, terminate the agreement, giving the relevant notice periods. Once the agreement has ended it’s up to the Big Local partnership and locally trusted organisation to decide whether to continue the relationship when you submit a new plan to us, or whether to choose another locally trusted organisation. 

We carry out due diligence checks each time a new funding agreement is put in place. Where funding is agreed for more than one year, your locally trusted organisations must send us their annual financial accounts each year.

Monitoring

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Your locally trusted organisation will report to us and to you every six months. We call this monitoring and will include: 

  • how much Big Local money has been used and for what?
  • has the money been used as set out in the agreed budget? If not, then what happened and why?

You can agree locally on any additional reporting between the partnership and the locally trusted organisation that suits you and your locally trusted organisation.

What funding does the locally trusted organisation receive?

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The locally trusted organisation receives funding based on the budget in your plan and the payment schedule attached to the funding offer letter, so that everyone is clear on what money will be provided and when. 

We also provide locally trusted organisations with a contribution towards partnership support and/or grant administration – which is 5% of the total spend. This contribution is in addition to your £1m and is only available once we endorse your Big Local plan to acknowledge the responsibility of administering plan funding.

If, by the end of the agreement, your locally trusted organisation spends less than budgeted for, as set out in the funding agreement, they need to agree a variation to your timeline or activities with us, so that money can be spent over a longer time period. Or, your locally trusted organisation must return the unspent funds to us (as well as the proportionate 5%) and the funds will be added to the balance of your area’s £1m so you can use it in the future. 

If you choose to fund an organisation that supports you with social investment, alongside the loan itself, we provide an administration loan fee to the organisation instead of 5% as a contribution to costs. This will be detailed in their funding agreement. For more information on social investment please see our guidance on Social investment and Big Local.

What if we want our locally trusted organisation to do more than receive, account and distribute the funding?

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Your Big Local partnership might want your locally trusted organisation to do more than receive, administer and account for the Big Local funding. So, you might want your locally trusted organisation to provide extra support and/or deliver parts of the Big Local plan, which could include:

  • organising and running community events or festivals
  • delivering parts of your plan, for example running a community hub or activities for young people
  • employing and managing a worker
  • running a small grants scheme or participatory budgeting activities.

It’s a good idea for Big Local partnerships and locally trusted organisations to agree your relationship in writing. This agreement does not need to be long or complicated but should include roles and expectations, any services or support provided, the funding amount and time period as well as any local working arrangements and reporting on progress or spend.

How many locally trusted organisations can we have?

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Each Big Local partnership might want to work with more than one locally trusted organisation. This will depend on the Big Local plan and the skills and resources required. The difference between a locally trusted organisation and another organisation that you might fund is that we expect locally trusted organisations to receive the funding from us at Local Trust and then set up and put in place funding agreements with other organisations or people to run Big Local activities, projects or services locally. We also expect locally trusted organisations to support the partnership with Big Local.

But, do keep in mind that the more locally trusted organisations you have at the same time, the harder it might be for your partnership to keep track of overall progress and spend on your plan as each of them will have a separate relationship with us and with the partnership.

What about working with other organisations?

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While you might just have one locally trusted organisation, we expect a wide range of people, community groups, charities, organisations, businesses and public agencies will be involved in Big Local. Some may provide and deliver services and activities on your behalf but not be your locally trusted organisation. It is these organisations that your locally trusted organisation will fund on behalf of your Big Local partnership. These organisations do not have a direct relationship with us, but they might work closely with you. In these instances it is the responsibility of the locally trusted organisation to put in place appropriate funding agreements and arrangements that set out:

  • what the organisation will deliver or provide
  • the cost
  • the time period
  • what’s expected from the activity, project or service
  • reporting requirements.

Changing locally trusted organisation

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There are many reasons why your locally trusted organisation might change. For example, your locally trusted organisation might experience changes which mean they can no longer support the partnership. Or you might develop a need for a different type or level of support that your current locally trusted organisation cannot provide.

The funding agreement which is between us and the locally trusted organisation can be terminated with three months’ written notice by either side. Please note that the Big Local partnership cannot terminate this agreement; we need to do this on your behalf. If your Big Local partnership, the locally trusted organisation and Local Trust all agree, a funding agreement can be terminated with a shorter notice period. 

Your new locally trusted organisation will need to meet our criteria and pass our due diligence checks before we can put a funding agreement in place with them. When changing, it’s a good idea to think about a handover period to cover the time it takes for us to set up a funding agreement with your new locally trusted organisation. Otherwise there will be some time when funding is not available to your area.

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