Exclusive: David Cameron’s Big Society in tatters as charity watchdog launches investigation into claims of Government funding misuse

The organisation was given at least £2.5 million of National Lottery funding and public-sector grants despite having no record of charitable activity

Political Editor

David Cameron’s flagship Big Society Network is being investigated by the Charity Commission over allegations that it misused government funding and made inappropriate payments to its directors – including a Tory donor.

The organisation, which was launched by the Prime Minister in 2010, was given at least £2.5 million of National Lottery funding and public-sector grants despite having no record of charitable activity.

The Independent has learnt that it has now been wound up, having used much of the money on projects that came nowhere near delivering on their promised objectives.

Two senior figures on government grant awarding bodies have also made allegations that they were pressured into handing over money to the Big Society Network despite severe reservations about the viability of the projects they were being asked to support.

Liam Black, a former trustee of Nesta, which was then a public body sponsored by the Department for Business, said Nesta had been “forced” to give grants that totalled £480,000 to the Big Society Network in 2010 without a competitive pitch. He described it as a “scandalous waste of money”.

Another senior figure involved in the decision to award £299,800 from the Cabinet Office to the organisation said the funding request had initially been turned down.

“When we did the analysis we turned them down because the bid did not stack up,” they said. “But we were told to go back and change the criteria to make it work.”

Labour said it was writing to the Cabinet Secretary, Sir Jeremy Heywood, asking him to investigate Labour said it was writing to the Cabinet Secretary, Sir Jeremy Heywood, asking him to investigate (Getty Images)
Tonight Labour said it was writing to the Cabinet Secretary, Sir Jeremy Heywood, asking him to investigate whether political pressure had been applied to give an organisation with close ties to ministers “special treatment”.

The Independent understands that the Charity Commission is also looking into allegations that some of the “restricted funds” given by the Cabinet Office for a childhood obesity project were transferred to pay down the deficit of a linked company.

It is also investigating payments made by the charity “for consultancy services” to two directors of the charity and its chair, Martyn Rose.

Mr Rose, who helped set up the Big Society Network, also contributed more than £54,000 to the 2010 Conservative election campaign. 

Tonight he said he had no memory of the payment but added that it was possible “one of my companies did work on its behalf”.

He said he had personally put £200,000 into the Big Society Network which he had not got back. “With hindsight, of course, if we had all known that the projects were not going to work we would have been idiots to do them,” he said.

“[The truth] is that in the early stages of social investment some will work and some won’t.”

Giles Gibbons, a trustee of the charity and a former business partner of Steve Hilton, David Cameron’s “blue skies thinker”, added that he did not believe any of the payments made by the charity had been in any way inappropriate.

A marked difference was found between what Big Society Network projects claimed they would achieve and what they did (Getty Images) A marked difference was found between what Big Society Network projects claimed they would achieve and what they did (Getty Images)
An examination of the Big Society Network projects, funded by the Government and the lottery, reveal a marked discrepancy between what they claimed they would achieve and what they did.

They included:

  • A project called “Your Square Mile” whose purpose was to encourage and enable local people to improve their community. It was awarded £830,000 by the Big Lottery Fund – despite officials assessing the application as “weak” in three out of the six criteria. In February 2012 the project had attracted just 64 signed-up groups compared with the one million predicted in the funding application.
  • A project called Get In  – to tackle childhood obesity through sport. In April 2012 it was awarded a grant of £299,800 from the Cabinet Office despite officials concluding it was unlikely to meet its stated objectives. They were told to change their selection criteria and approve the grant. The project was never even launched.
  • Britain’s Personal Best,  which aimed to build on the Olympic Games by encouraging people to excel in athletic, educational or creative challenges. Given £997,960 in April 2013 by the Big Lottery Fund, it claimed it would sign up 120,000 people to take on challenges in their community – but was wound up within months after failing to meet all the milestones the Big Lottery Fund had set.

A long-running investigation by Civil Society News into Big Society Network funding has also discovered that the organisation was given statutory grants totalling £480,000 in 2010 by Nesta – which was then an arms-length body of the Department of Business – without a competitive pitch being held.

Steve Hilton was instrumental in getting Government backing for the Big Society Steve Hilton was instrumental in getting Government backing for the Big Society (PA)
About £150,000 was to part-finance the core costs of running the organisation in its early stages and £330,000 was to support four projects  – called Nexters, Spring, Your Local Budget and It’s Our Community.

Nesta is now an independent charity but said: “While the vast majority of Nesta’s grants are made following open calls for proposals, we do have the ability to provide grants to projects that fit with our vision and advance our objects outside of open calls for proposals. That is what happened with the grants to the Big Society Network.”

Labour is now demanding an inquiry into links between the Big Society Network and senior Conservatives. Several members of the network’s staff had worked with and for ministers including Michael Gove and Theresa May, and two had stood as Tory candidates.

Giles Gibbons had been a partner in the same firm as Steve Hilton and co-wrote a book with him.

He said tonight: “Am I disappointed that the network didn’t have a more positive impact? The answer is 100 per cent yes. Do I think we could have done more about that? Yes I think we could have.

"There was powerful core at the heart of what we were trying to do but was our delivery was not good enough. Is there anything untoward in the way in which we have worked? I genuinely don’t think there is.”

Several members of the network’s staff had worked with and for ministers including Michael Gove Several members of the network’s staff had worked with and for ministers including Michael Gove (Getty Images)
But Lisa Nandy, the shadow minister for civil society said: “It’s bad enough that millions of pounds of public money were squandered, but the connections between these organisations and the Conservative party are deeply concerning.”

A spokeswoman for the Charity Commission said: “Our case into the Society Network Foundation remains open and ongoing. We have received a response to questions we had relating to connected-party transactions and the use of a grant.

“However this does not fully address our concerns and we are in the process of engaging further with the trustees. We are also awaiting copies of documents that explain the grounds on which a grant was given.”

The big chumocracy: Key players

Steve Hilton

A former advertising executive who became David Cameron’s ‘blue skies thinker’. He championed the idea of the Big Society, and was instrumental in getting Government backing for it when the Tories came to power.

Martyn Rose

A businessman who gave £60,000 to the Tories in the run-up to the last election and became chairman of the Big Society Network. Has worked with both Theresa May and Michael Gove

Giles Gibbons 

Co-wrote a book with Steve Hilton called Good Business. He became a trustee of the Society Network Foundation – the charitable arm of the Big Society Network. It is now being investigated by the Charity Commission.

We have been asked to point out that Big Society Network and the Social Network Foundation have not been wound up as corporate entities

Since publication of the above, an application dated 7 August 2014 has been made by the Trustees  to have the corporate entity Society Network Foundation Ltd struck off the Register of Companies. See our further report http://www.independent.co.uk/news/uk/politics/big-society-charity-winds-up-after-claims-it-misused-up-to-25m-in-funding-9681836.html

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Junior Estimator

£17000 - £18000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Senior Bookkeeper

£19000 - £21000 per annum: Recruitment Genius: Small Family Accountancy Practi...

Recruitment Genius: Business Development Manager - OTE £50,000

£18000 - £50000 per annum: Recruitment Genius: This company is recruiting for ...

Recruitment Genius: Telesales Manager / Account Manager

£20000 - £25000 per annum: Recruitment Genius: This B2B software supplier, spe...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence