PLAIN TEXT - Delivering Big Local: the role of Locally Trusted Organisations (a scoping paper)

Local Trust research paper #19.

A version of this paper was published internally by Local Trust in October 2021. This version (December 2022) has been edited to make it accessible for a general audience, with core terms and concepts explained wherever possible.

Key service providers, known as Locally Trusted Organisations (LTOs) are an integral part of the Big Local programme (1) and form one side of the ​‘relationship triangle’ involving Local Trust and Big Local partnerships (2). Their main role is to manage Big Local funding on behalf of volunteer-led partnerships. LTOs have been involved from the early set up stages of the Big Local programme, and some of the same organisations continue to be LTOs for Big Local partnerships today. Although integral to the delivery of the programme, until recently there has been little research on their specific role within the programme or on the organisations acting as LTOs for Big Local partnerships. 

Over the last few years there has been an increased acknowledgement of their importance, influence and role in the successful delivery of local Big Local plans and the programme overall. As the Big Local programme enters its final few years, as areas are supported to ​‘spend out’ their Big Local funding, and as Local Trust focuses more on the outcomes and legacy of Big Local, it is a good time for us to understand their role within the programme and, importantly, the specific part they play in enabling resident-led decision making and control. 

This paper sets out what Local Trust knows about LTOs in general and in relation to resident-led decision making and control. Its purpose is to help identify gaps in knowledge and questions to explore through research. It is based on conversations with Local Trust staff and partners, and a review of existing internal data. However, it is important to acknowledge that due to the contractual nature of our relationship with LTOs, most of our internal evidence focuses on the instances where the relationship does not work, as opposed to where it does.

Before exploring their role, it’s important to clarify the thinking behind the LTO model within the programme. In essence, LTOs are a mechanism for getting funding into 150 Big Local areas, as Big Local partnerships (the groups of decision-making residents) are unincorporated bodies. LTOs are a way of holding, looking after and distributing funding on behalf of partnerships. 

However, they are also a way of freeing up the volunteer partnerships from the financial and administrative burdens of looking after and managing the funding themselves, leaving them to focus on making decisions about how to use it, and on their strategy and outcomes. LTOs do not decide how to use the Big Local funding, but they are responsible for ensuring it is spent appropriately according to the terms and conditions of their funding agreement with Local Trust, and in line with their own processes and procedures. The decision-making powers they have fall within this scope. 

From the beginning, the programme set out to use existing organisations as LTOs, as opposed to creating new legal bodies to perform this funding management role. It was about building on the communities’ existing assets, using local, existing organisations and the skills and experience already in communities to support Big Local partnerships to deliver their plans.

There are several key aspects to the LTO role that are useful to set out and explain. These can help to understand what is expected of LTOs ​‘on paper’. 

• LTOs are chosen by the Big Local partnership. They are not selected by Local Trust, thereby giving partnerships control over the organisation they work with. When choosing an LTO, they are asked to be ​“open, fair and transparent” in their process, and consider who they could work with to achieve their vision for the area (3).
• LTOs’ ​‘core’ or minimum role is to manage and administer the funding and provide administration and partnerships support to enable this. LTOs are responsible for receiving and administering the Big Local funding for partnerships, as per the Big Local plan and the (signed) grant agreement between themselves and Local Trust (4).
• They need to pass due diligence checks carried out by Local Trust. Before signing a funding agreement with Local Trust, LTOs must pass a due diligence check to see if they have: the experience/​capability to administer and account for the funding; the capacity to support the partnership; are legally constituted; and can be a LTO within their own legal objects. Once passed, they sign a grant agreement with Local Trust and are expected to follow its terms and conditions (5).
• LTOs are legally and financially responsible for the Big Local funding and take on the financial risk for Big Local partnerships. They are expected to follow their own processes, procedures and financial controls in carrying out this responsibility, and in meeting the terms and conditions of their legally binding agreement with Local Trust. LTOs are expected to use their own processes/​procedures for tendering, recruitment and grant applications for example, and have internal controls to ensure the funding administration and expenditure are accounted for properly and legally (6).
• LTOs receive 5% of the total Big Local plan spend as a contribution towards ​“partnership support and/​or grant admin”. LTOs are not expected to perform their ​‘core’ role within the programme ​‘for free’, and the contribution does not come out of the areas’ £1.15m Big Local funding (7). Any unspent funding within Big Local plans is returned to Local Trust at the end of the funding agreement, along with the related proportion of the 5% contribution (8).
• LTOs can also take on additional roles to support Big Local partnerships if they choose to and many of them do. LTOs can support partnerships beyond their ​‘core’ funding management role. For example, partnerships can decide to commission LTOs to deliver services and activities on their behalf, and as per their Big Local plan. In 2021, Big Local reps (individuals appointed by Local Trust to offer tailored support to areas) said over a third of partnerships do this (9). Importantly, it is recommended any extra support (and new relationship) is agreed in writing, setting out respective roles, expectations, services/​support to be provided, as well as funding, timescales and working/​reporting arrangements (10). Payment for this support is included in the budget for Big Local plans.
• The most common additional role LTOs have taken on is employing or subcontracting paid workers on behalf of Big Local partnerships. In July 2021, the majority of partnerships had an LTO that performed this role for them (11). As partnerships are not legal entities and cannot employ or contract themselves, LTOs can choose to do this for them (or contract another organisation to do this). Although LTOs ultimately manage workers, they are expected to discuss the relationship between the worker and the partnership, define this clearly, and agree respective roles and responsibilities.
• LTOs are responsible for setting up service level agreements or contracts with delivery organisations, on behalf of Big Local partnerships. As partnerships are not expected to deliver activities and projects themselves, most commission others to deliver on their behalf. In these instances, LTOs are responsible for putting in place funding agreements and arrangements detailing the nature of the support, cost, time, expectations and reporting requirements (12). LTOs will then fund these delivery partners using Big Local funding. If partnerships also agree that LTOs are to manage these relationships, they can decide to fund LTOs to do so out of their Big Local funding.
• Big Local partnerships can have more than one LTO and any type of organisations can be an LTO. Partnerships can have multiple LTOs, but they are encouraged to consider the impact this might have on their ability to track progress and spend when supported by more than one organisation (13). Any organisation can be an LTO, as long as they pass due diligence checks.
• LTOs are expected to work with partnerships to achieve their vision for the area, and to have good relationships with them, Local Trust and their representatives (reps). LTOs have an important role in ensuring the delivery of Big Local plans and are expected to work collaboratively with the partnership (14). They are also expected to have good working relationships with reps and Local Trust. It is recommended that LTOs and partnerships agree on how they will work together in practice, including the LTOs’ role in relation to decision-making about expenditure, and reporting arrangements (15). It is also recommended the relationship and agreements between the two are set out in writing, through terms of reference or Memorandum of Understanding (MOU), for example (16).

There are currently 133 organisations acting as LTOs within the Big Local programme (17). The majority of partnerships have one LTO, but five partnerships have more than one. Nine organisations are acting as a LTO for more than one partnership. Some organisations have been LTOs since the start of the programme, but most partnerships (95) have changed LTO at least once. The core LTO role is to hold and distribute funding on behalf of partnerships, and all LTOs will do this. In September 2021, they held a total of over £10.736m in Big Local funding, with the average (median) around £66,000 (18). In 2020, a survey of all partnerships showed 6% of members were from an LTO (19).

A variety of organisations across the third, private and public sectors act as LTOs. The types of organisations include community foundations, faith organisations, accountancy firms, community voluntary services, for-profit businesses and community centres, with the majority from the community and voluntary sector (20). In June 2021, 25 organisations from the public sector acted as LTOs, including local authorities, schools and housing associations. LTOs vary in size, with the highest proportion of LTOs (38%) being organisations with an annual turnover of between £100,000-£500,000 (21). A third of areas (55) have a LTO physically based in their area and two thirds have one based outside of it, this is perhaps expected, as a lack of social infrastructure was one of the reasons areas were selected for the programme (22). The majority of partnerships (118) have a LTO that does similar work to Big Local, such as community development or regeneration (23). Since the start of the programme, eight Big Local partnerships have decided to incorporate and become their own LTO (24).

The ​‘core’, minimum, role of a LTO is to receive, administer, distribute and report on Big Local funding on behalf of the partnership. The support LTOs provide here is seen positively by partnerships. In a 2020 survey of partnership members, 88% of respondents felt LTO reporting on their plan expenditure was very helpful or helpful, and 89% found their LTO’s overall management of Big Local finance very helpful or helpful (25). This positive feedback is mirrored by reps. A 2021 rep report reveals 75% (113) of Big Local partnerships work with an LTO who shares appropriate and timely financial information with them (26).

Many LTOs have moved beyond providing the ​‘core’ funding management role and take on additional roles and responsibilities to support Big Local partnerships (27). A survey of reps reveals 61% of Big Local partnerships (91) have a LTO that directly employs, manages and supervises at least one paid worker on their behalf, and 9% (13) have a LTO that directly manages and supervises one or more delivery partner for them (28). Over a third of Big Local partnerships (54) fund their LTO to provide additional support to them, such as commissioning them to deliver services and activities (29). This funding is in addition to the 5% contribution for managing Big Local finances or any received for managing a paid worker.

As well as the extra paid support to partnerships, LTOs also provide a range of support ​‘for free’. According to reps, LTOs support Big Local partnerships in the following ways: 

• Advertising/​promotion.
• Access to space (e.g., a hub or office).
• Access to equipment.
• Signposting to local information.
• Brokering, and supporting relationships, with stakeholders.
• Community engagement.
• HR Support (e.g., recruitment).
• Financial management advice (e.g., managing risk).
• Procurement/​commissioning support (e.g., commissioning activities/​projects, tendering).
• Programme advice/​development.
• Training and development (e.g., governance).
• Supporting large purchases (e.g., hubs).
• Supporting handovers to incorporated bodies.
• Setting up contracts/​service level agreements with partners.
• Supporting commissioned organisations.

These examples are not comprehensive, but they highlight the range and variation of ​‘extra’ support provided and how this differs across areas. For example, some LTOs do not use the 5% contribution for grant administration at all; instead, they ​‘donate’ this to local activity or use it directly to fund local activities. Although within their rights, some do not charge partnerships for managing paid workers.

Overall, partnership members and reps have a positive perception of LTOs and the support they provide. Over 80% of respondents to a survey of partnership members felt the LTO’s support in planning and delivering their Big Local plans, and in managing and supervising their paid workers, was very helpful or helpful (30). Further, 88% of respondents felt overall support from their LTO was very helpful or helpful, and- according to reps- 88% of partnerships have a good relationship with their LTO (31). We know the majority of partnerships have LTOs who also employ or contract paid workers on their behalf, and as part of this LTOs, would usually be responsible for providing support and training, as per any other employment arrangement. In a survey of paid workers in 2018, we learned 83% of respondents were employed or contracted by the LTO (32). Although the findings were not separated by those supported specifically by LTOs and those supported by other organisations, the survey does tell us something about how workers were supported in general. For example, over 80% of respondents felt: supported by the organisation that employed/​contracted them; that they had the support and resources needed to carry out their role; and felt clear about their role and responsibilities (33).

Importantly, according to reps, 88% of partnerships have a LTO that is clear about its role and responsibilities, and 84% have a LTO that provides an appropriate level of influence in decisions made by the partnership (34). Reps also feel 71% of partnerships have a LTO that understands the resident-led ethos and values of the programme (35).

Many partnerships have arguably become more confident and ambitious in what they want to do and the projects they want to develop. This could potentially be interpreted as a success of the Big Local model and of the LTO role, i.e., protecting them from bureaucracy and paperwork, thereby enabling them to focus on more ambitious plans and strategies. Either way, we have seen LTOs choose to take on more than the ​‘core’ role by supporting partnerships in additional ways to help them deliver their plans. Some of this extra support is funded and paid for, and some of it is given for ​‘free’. We know the majority of LTOs do similar work to Big Local, so it’s possible many see this extra support as a natural role for them, and one that could also help them achieve their own organisational outcomes and strategies. 

Organisations can benefit from being a LTO role within the programme. They receive finances and funding to deliver support and activities (as discussed), which can help them develop their networks and experience working directly with residents and communities (36). Their work with Big Local can also lead to organisational growth and enable them to attract additional funding (37). Some have been identified as Big Local ​‘legacy bodies’, i.e., organisations who could continue the legacy of Big Local after the funding and programme ends in 2026. Within this, we see organisations merging with partnerships, combining their capacity, resources and strength. This not only helps to build the social infrastructure within areas but can also contribute to the overall legacy of Big Local within areas and the programme overall.

The LTO model and the role of LTOs within the programme can be a hard one to understand and get right. For some, it can be challenging balancing supporting resident-led decision- making, with their legal and financial responsibility to manage the risks associated with managing the funding (38). There are also aspects of the model that may be the source of tension for some, such as confusion over the 5% contribution and what it covers (39). Research has also questioned if the LTO model needs to be tailored to work more effectively in some areas (40).

There may also be an element of confusion about the different roles and responsibilities of LTOs, partnerships, reps and paid workers within the programme, and how they all work together. Research has highlighted examples of reps picking up LTO responsibilities or vice versa, and workers picking up LTO tasks and aspects of the ​‘core’ LTO role, for example (41). In scoping conversations, there was the feeling this confusion can lead to challenges for LTOs and partnerships later, and the perception that this has become more common as plans become more complex, higher sums of funding are involved and financial risks to LTO increase. 

As we enter the final phase of the programme, we are increasingly focused on the successful delivery of the programme and in helping areas (and Local Trust) secure their legacy. As part of this, attention has shifted to the financial resilience and capacity of LTOs.

As a volunteer, resident-led programme, much of the support provided has focused on building the skills, knowledge and capacity of volunteer residents on partnerships, and less on the organisations (or paid workers) supporting them. However, LTOs are supported within the programme, primarily through various pieces of programme guidance (explored below); access to members of staff (usually as part of due diligence checks, finance reporting processes and review visits); support from reps (as part of their ​‘core’ assignment, also explored below); LTO focused learning and networking events; informal drop-in sessions for LTOs, and peer learning and networking spaces. This support has evolved over time in response to need and developments within the programme, and as Local Trust increased its own capacity to offer it. 

A review of topics from previous events reveals the issues relating to LTOs needing attention, much of it aligning with the challenges mentioned previously. For example, topics include understanding the programme; an overview of programme guidance; supporting paid workers; managing Big Local finances; explaining the LTO role and responsibilities; explaining their funding agreement; and understanding how to work best with Big Local partnerships. More recently, an online space was created for LTOs to share information and network, a regular, online drop-in session is held for LTOs to discuss topics of interest, and a regular newsletter is sent with key programme information and resources. 

Programme guidance for, and relating to, LTOs has developed along with the programme and (to an extent) it reflects the non-prescriptive values of the programme, allowing for some interpretation and flexibility (42). Guidance states LTOs are ​“expected to work with the partnership to achieve the vision that they have set for the Big Local area”, but it doesn’t tell them how to do this. Reps have several key responsibilities in relation to LTOs. This formally comes in the form of supporting them to ​“understand what is required to carry out [their] roles and responsibilities in line with the terms and conditions of funding”, checking they act according to Local Trust guidance, and reporting issues or concerns relating to their financial health (43). It is likely that reps approach and practise this differently.

According to reps and respondents to a survey of Big Local partnership members, the majority of LTOs have an appropriate level of influence over partnership decisions, are clear about their roles and responsibilities, provide helpful support to partnerships and understand the Big Local ethos and values. However, internal conversations and a review of data and research suggest a more complex picture. This section highlights some of the ways in which LTOs can potentially hinder resident-led decision-making and control. 

Understanding the Big Local ethos and values:

LTOs can potentially hinder resident-led decision-making and control by not fully understanding or following the resident-led ethos or the values of the programme. Further, a minority might have a different understanding or interpretation of what resident leadership means and looks like (44). There are a few examples of LTOs seeing the Big Local funding as theirs as opposed to the communities’, putting them at odds with the partnership’s work to control, and make decisions about, the resource. A small number of LTOs may find the pace of resident-led action and decision-making too slow and feel progress would come faster if they (or others) were in control (45). In other instances, it was suggested some LTOs may feel uncomfortable with the Big Local model and in community decision-making generally, feeling they (as paid ​‘professionals’) would know, and do, better (46). This can potentially lead to instances where they may behave in what’s perceived to be a paternalistic manner with partnerships. Although not attributed to specific types of organisations, this might be harder for LTOs lacking an understanding of, or experience in, community development. 

Providing financial information to partnerships: 

LTOs can potentially hinder community control and decision-making by failing to provide the partnership with regular, quality, accurate and accessible financial information. This is a key responsibility of the LTO, but when it doesn’t happen it can be difficult for partnerships to make informed decisions about their funding. Some LTOs might struggle to do this if it’s not something they would usually provide, whilst some others might lack the capacity or capability to do so. 

Organisational culture and attitude to risk:

LTOs take on the financial risk for partnerships, and for some this might encourage them to act in way perceived to be ​‘risk averse’. Some suggested their responsibility to manage risk can see them vetoing partnership decisions, potentially giving them an influence over the direction of the programme within the area (47). This can also include LTOs deciding not to take on building leases or employ/​contract paid staff on behalf of partnerships (48). It was suggested this attitude to risk can intensify as partnerships develop more ambitious and complex plans, commit to spending larger sums of funding and work to deliver bigger projects. Similarly, as areas spend more there is arguably a greater interest in Big Local activity and accountability, placing even more importance on LTOs to follow processes and procedures, and manage the funding appropriately (and legally). LTO processes and procedures can be seen as frustrating partnership decision-making, making it harder (and slower) for some partnerships to make decisions, pay invoices, access funding and progress projects (49). However, there are also suggestions that partnerships themselves might not always understand the LTO’s processes and procedures. 

Understanding their role and responsibilities:

There is a perception that some LTOs are more aware of their role and responsibilities than others. In relation to their role managing the funding, this is set out in their grant agreement with Local Trust. In addition to this agreement, there are several pieces of programme guidance explaining LTO roles and responsibilities in relation to the partnership, workers and the funding. However, research suggests the guidance isn’t always used, clear enough and is interpreted differently by LTOs and partnerships across the programme (50).

Misunderstandings or differing interpretations of guidance can lead to varying levels (and quality) of support provided to partnerships, and in different experiences for partnerships and LTOs themselves. When the capacity of the partnership isn’t as strong as it could be, there may be the potential for some LTOs to ​‘overstep’ and become more dominant in decision-making, particularly if they regularly attend partnership meetings or are members of the partnership (51). Even if LTOs are clear about their roles and responsibilities, this could be difficult to maintain as organisations undergo changes and a turnover in staff. 

Supporting beyond the ​‘core’:

Many LTOs have chosen to support partnerships beyond the ​‘core’ role, and this has multiple benefits for partnerships and their ability to achieve their ambitions for their communities. But, in a small number of cases, it could have a detrimental impact on the partnership’s ability to make decisions and exercise control over their funding and Big Local plan. LTOs as service deliverers can potentially raise conflicts of interest and add a layer of complexity to their ​‘original’ relationship with the partnership (52). When LTOs deliver elements of the plan, it can be problematic if they don’t deliver exactly what the partnership wants or has agreed, with others, such as the rep, stepping in to resolve if things go wrong. 

LTOs can potentially hinder resident control and decision-making in their role as commissioners and managers of delivery partners. Research highlights instances of delivery partners and LTOs contacting and communicating with one another, with the partnership essentially out of the loop (53). There have also been examples of LTOs failing to manage partners effectively once commissioned, setting up inappropriate contracts or not challenging deliverers to deliver to the outcomes and specification developed by the partnership (54). These examples are not widespread, but they can hinder the partnerships’ ability to achieve their desired outcomes and undermine the decisions they have made. 

Finally, LTOs are often responsible for managing workers as the employing/​contracting organisation, but partnerships are expected to have a role in agreeing activities, workplans, outcomes, and feeding back on performance. However, it is likely this is approached differently (and perhaps inconsistently) across partnerships and LTOs, potentially removing some residents from their space to influence and decide how they want to be supported by the workers they are funding.

LTOs are a key part of the Big Local programme and are supporting many partnerships in ways beyond their ​‘core’ funding management role. This support takes on different forms, is both paid for and ​‘free’, but helps areas to deliver their plans and achieve their visions for their communities. LTOs are directly connected to the fabric of Big Local in areas, acting as direct deliverers, commissioners, managers and employers on behalf of partnerships, which can all change the nature of their relationships with partnerships. They also play a vital role in employing or contracting paid workers on behalf of Big Local partnerships, and it is difficult to see how Big Local areas would have been able to deliver their plans and spend their funding as they have, if most LTOs had not stepped forward to take on this additional responsibility. Further, the Big Local model can be difficult to understand and get right, but many LTOs have remained patient with it and stayed the course, even when the financial contribution they received for their ​‘core role’ may not have been the return they had perhaps expected. 

The overall feedback on LTOs and their support is very positive, from both reps and partnership members. However, some challenges have come to light. These relate to their: understanding of their role; balancing their responsibility to manage the finances with supporting partnerships and attitude to risk. 

According to reps and partnership members, most LTOs exercise appropriate influence of partnership decision-making, but in a small number of cases there are ways in which they can potentially hinder resident-led decision-making and control. Those include through not understanding (or delivering) their role and responsibilities as per agreements or guidance, difficulties understanding (or practicing) the ethos and values of the programme, challenges providing financial information to partnerships, holding a risk averse attitude, and potentially hindering partnership decision-making and control in their roles as employers of paid workers, contract managers, commissioners or deliverers. 

Following this scoping, we commissioned research to explore the role of LTOs within the Big Local programme in depth. The report from the research is also available on the Local Trust website.

1. Big Local is a resident-led funding programme providing people in 150 areas in England with £1.15m each to spend across 10–15 years to create lasting change in their neighbourhoods.
2. By 2021, eight Big Local partnerships had become their own LTO.
3. Locally Trusted Organisations, programme guidance. (Programme guidance is no longer available online).
4. Managing Big Local funding, programme guidance.
5. Ibid.
6. Managing Big Local funding, programme guidance.
7. Locally Trusted Organisations, programme guidance.
8. Locally Trusted Organisations, programme guidance.
9. Internal data, Big Local rep report, 2021–22, Q1. Big Local reps are individuals appointed by Local Trust to offer tailored support to a Big Local area and share successes, challenges and news with Local Trust.
10. Locally Trusted Organisations, programme guidance.
11. Internal data, Big Local rep report, 2021–22, Q1.
12. Locally Trusted Organisations, programme guidance.
13. Ibid.
14. Managing Big Local funding, programme guidance.
15. Ibid.
16. Funding agreement and processes for Big Local plans, programme guidance.
17. Internal programme funding team data.
18. Ibid.
19. Internal data, Big Local partnership review, 2020.
20. Internal programme funding team data.
21. Ibid.
22. Internal data, Area Assessment Tool (AAT).
23. Ibid.
24. Internal programme funding team data.
25. Internal data, Partnership members’ survey, 2020.
26. Internal data, Big Local rep report, 2021–22, Q1.
27. Big Local: the early years. Evaluation report, 2014. NCVO. Available at: https://www.learningfrombigloc….
28. Internal data, Big Local rep report, 2021–22, Q1.
29. Ibid.
30. Internal data, Partnership members’ survey, 2020.
31. Internal data, Big Local rep report, 2021–22, Q1. Based on responses covering 141 Big Local areas.
32. Working on Big Local: a survey of paid workers, 2018. Available at: https://www.learningfrombigloc….
33. Ibid.
34. Internal data, Big Local rep report, 2021–22, Q1. Based on responses covering 141 Big Local areas.
35. Ibid. Big Local ethos and values include resident-led (residents are in the lead and make decisions), long- term (over 10–15 years), patient and non-judgemental (communities work at their own pace, with time and opportunity to learn), non-prescriptive (residents spend on their own terms and in their own time).
36. Scoping conversation, and Big Local: Beyond the Early Years. OBS: The longitudinal multimedia evaluation of Big Local, 2015–2016. TSRC, 2017. (Web page no longer available).
37. Big Local as Change Agent, TSRC, 2020. (Web page no longer available).
38. Scoping conversation.
39. Scoping conversation.
40. Big Local: Reflections on Community Leadership (Paper two), TSRC, 2020. (Web page no longer available.)
41. Scoping conversation, and Big Local: Beyond the Early Years.
42. Scoping conversation.
43. Internal programme team data. Big Local rep assignment.
44. Big Local: the early years. Evaluation report.
45. Scoping conversation.
46. Ibid., and Big Local: the early years. Evaluation report.
47. Big Local as Change Agent.
48. Big Local: Beyond the Early Years. OBS.
49. Scoping conversation.
50. Big Local as Change Agent.
51. Scoping conversation.
52. Scoping conversation.
53. Big Local as Change Agent.
54. Ibid.