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Great News for Voluntary organisations - Interest fee loans to assist 3rd sector procurement bids

Loan fund backs sector bodies in contract bids By Andy Ricketts - Third Sector Online, 30 June 2008

Futurebuilders England has opened a £1m loan fund to help voluntary organisations prepare bids for contracts to deliver public services.

Third sector organisations can apply for three-year interest-free loans of between £3,000 and £50,000 to help pay for costs associated with bidding, such as legal fees.

To be eligible for loans, organisations must show that they could not secure funds from a commercial lender and would have a realistic chance of winning the contract they were bidding for.

The Futurebuilders fund, which Futurebuilders England distributes, is a £215m pot of government money designed to help charities win contracts to deliver public services.

Jonathan Lewis, chief executive of Futurebuilders, said he was aware that money it gave out could be classified as 'state aid', the term for public money that could be seen as distorting competitive markets, but the organisation had a procedure to avoid falling into that trap.

"It is an issue we are extremely aware of," he said. "We have a comprehensive investment policy that ensures we are not providing state aid to applicants."

Lewis said charities had the skills to win contracts but could not afford the bidding costs. "Our conversations with the sector tell us that providers often need money to fund tendering-related costs such as legal bills, financial expertise, staffing backfill and advice from procurement specialists," he said.

Third sector minister Phil Hope said: "The new Futurebuilders tender fund is highly innovative and really at the cutting edge of projects designed to help the third sector develop its public service role."