More than a third of voluntary organisations bidding for £30 million of Birmingham City Council grants have had their applications turned down following changes to the way the local authority allocates funding.
Bids by scores of community and faith groups to secure a three-year financial lifeline resulted in the budget being over-subscribed by 100 per cent, and only 143 out of 278 requests for cash are likely to be approved.
The figures have been published a year after the council began to consider major changes to the way it hands out money.
Cabinet members said they had serious concerns about the “unfair” system in place, which saw grants approved year after year with few questions asked about the way organisations used the cash they were given by the council.
Under a new criteria, each bid is appraised by officials in the council’s Adults and Communities Department and by Third Sector representatives against a set of compliance guidelines.
A confidential report to the cabinet on Monday recommends approval for the 143 bids regarded as meeting the new rules.
But the names of the successful and unsuccessful organisations are unlikely to be released until next month and the entire process may be challenged by a council scrutiny committee.
The council declined to say how many organisations funded at the moment stand to lose out and how many of the 95 bodies applying for grant-aid for the first time are in line to have their applications approved or rejected.
The cabinet report describes some of the 108 bids dismissed out of hand as being of “particularly poor quality” and notes that no requests by HIV/Aids groups were considered to be of an acceptable standard.
Organisations turned down will receive a programme of transitional support from the council and advice and guidance on other sources of funding.
A council spokeswoman said: “The strategy gives a fairer, clearer and more consistent way of funding third sector services with one of the key new elements being the provision of three-year funding.
“It is in response to historically uneven funding and concerns about value for money.”
Sue Anderson, the cabinet member for adults and communities, described the selection process as transparent. She said the total value of bids received totalled £60 million - twice the amount of money available.
Demand for financial assistance was unusually high this year following withdrawal of the Government Neighbourhood Renewal Fund from Birmingham, which in the past made millions of pounds available for community projects.
Coun Anderson (Lib Dem Sheldon) added: “We have engaged with our partners throughout and there has been no political influence.
“Whilst the third sector is a valuable partner in delivering services it has to deliver value for money. Although some applicants were unable to show what outcomes people would get, this process is about getting the best out of the sector and we have had some excellent applications from organisations that clearly show how they can benefit the people of Birmingham.
“It is worth pointing out that some of the successful bids in this round are from organisations that have been unsuccessful in bidding from previous programmes. This seems to support both the integrity of the process and the clarity of previous feedback.”
Birmingham Voluntary Services Council accepted many applicants for grant funding would be disappointed.
BVSC chief executive Brian Carr said: “The city must recognise there will be casualties in terms of organisations being de-commissioned and it is vital that there is a good support package in place for them.
“Whilst applicants have been justifiably frustrated at delays in decision-making, on the whole the council has made a genuine effort to work closely with the voluntary sector on making the process as fair as possible.”