What was the role of Locally Trusted Organisations in Big Local?

A Locally Trusted Organisation (LTO) was a term created by Local Trust for a mechanism to channel funding from the Big Local programme into the 150 Big Local areas. Each Big Local area was overseen by a resident-led partnership. The partnerships were not incorporated, so had no legal status. An additional level of oversight was needed for them to remain free of the regulations and procedures of charitable or corporate status, so they could quickly focus on the issues that mattered to them and make decisions (Dobson et al., 2022). 

One of the first decisions residents made within the programme was choosing their LTO, underlining that residents were in control. This meant working with Local Trust and advisers (including Big Local reps – expert advisers appointed to support partnerships) to work out what they wanted from the relationship and who could take on those responsibilities. Partnerships could also decide to end the relationship if it was not meeting their needs. Several did, deciding either to change LTOs or to take on the LTO responsibilities themselves. 

The core role of a LTO was to receive, administer, distribute, and report on Big Local funding on behalf of the partnership, for which they received a 5 per cent fee. This was paid by Local Trust so that the £1m budget for each area was not depleted. While high standards of practice were expected from residents, LTOs took on governance to relieve them of the legal and regulatory burden. By acting as ​‘bankers’ for resident-led partnerships, they provided security to Local Trust and to residents that the money would be properly accounted for, and rules complied with. 

A range of organisations became LTOs, but most were charities or umbrella organisations in the voluntary sector, such as Councils for Voluntary Service (CVSs). Housing associations, environmental charities, and others (from schools to GP practices) also acted as LTOs. Although a LTO was usually a single organisation, it didn’t have to be, and different organisations could take on different responsibilities.

As legal bodies, LTOs entered into grant agreements with Local Trust. Their key responsibilities were to manage and administer the funding and provide support to enable this, in line with the relevant Big Local plan and the grant agreement with Local Trust. They were legally and financially responsible for the Big Local funding and took on the financial risk for the partnerships. LTOs were expected to follow their own processes, procedures, and financial controls in carrying out this responsibility, and for jobs such as tendering, recruitment and grant applications (Local Trust, 2021).

LTOs did not decide how to spend funds but had to make sure it was in accordance with the terms and conditions set out by Local Trust. Every six months they had to report on spending to Local Trust and partnerships, except at the close-out stage when partnerships came to the end of their Big Local work. 

LTOs had to be legally constituted to perform their role and had to pass due diligence checks required by Local Trust (for example, ensuring the role was within their constitutional objectives, and they had sufficient financial experience). 

A LTO could work for more than one Big Local partnership, and a Big Local partnership could split their work between two or more LTOs (for example, by using different LTOs to employ workers and to manage financial reporting).

LTOs performed additional roles, most commonly, they employed (or subcontracted) paid workers on behalf of Big Local partnerships. Many also managed contracts and funding agreements on behalf of partnerships. A survey of Big Local reps in 2020 found that 61 per cent of partnerships had a LTO that directly employed, managed, and supervised at least one paid worker on their behalf, and 9 per cent had a LTO that directly managed and supervised one or more delivery partner. Over a third of partnerships funded their LTO to provide additional support, such as commissioning them to deliver services and activities. 

LTOs also provided unpaid support. Big Local reps reported that this included advertising, promotion and communication; meeting space and office equipment; recruiting and managing staff; advice on financial management, commissioning, and procurement; training and development for residents and partnership members; support with large projects and purchases; managing contracts; and brokering relationships with external partners and organisations. 

Generally, these different roles and ways of working were captured in a written agreement to minimise the risk of disputes. Local Trust provided programme guidance and other resources to help LTOs understand their role, the roles of others, and what was expected of everyone involved in the Big Local programme. 

Finally, LTOs were expected to work in line with the Big Local ethos and values: putting residents in the lead as decision-makers; long-term commitment and planning; a patient and non-judgemental approach; and being non-prescriptive about when and how money is spent.

The Locally Trusted Organisation (LTO) model had not been tried before. It was an attempt to learn from previous community development and regeneration programmes and find a radically different way to put residents in charge of spending, without burdening them with logistics and regulations (Wilson et al., 2024). Initiatives like the Single Regeneration Budget and the New Deal for Communities consulted and involved residents, but were not resident-led, and by channelling money through local authorities (or other institutions) the programme could have felt distant from residents. 

The term ​‘Locally Trusted Organisation’ was used to distinguish the model from existing initiatives and emphasise that residents were in charge: residents could trust them to hold money on their behalf and work together. The term was intended to be inclusive, recognising that while the organisation may not be in the same area as the Big Local partnerships it worked with, they had to have the confidence of residents. 

Unlike government-led initiatives, the Big Local programme had few predetermined outputs or outcomes, beyond creating a resident-led partnership and a community-led vision and plan for each area. Four intentionally broad outcomes were set by the National Lottery Community Fund: 

• communities will be better able to identify local needs and take action in response to them
• people will have increased skills and confidence, so that they continue to identify and respond to needs in the future
• the community will make a difference to the needs it prioritises
• the area will be an even better place to live. 

To enable these outcomes, the LTO approach was chosen so that money could be handled transparently and accountably; residents could be freed to focus on the decisions that mattered to them; and so that the emphasis from Local Trust could be on relational support rather than policing. Local Trust was responsible for providing the grant to LTOs; LTOs in turn were responsible for supporting partnerships. Local Trust also directly supported Big Local partnerships via Big Local reps, centrally organised training, networking and events and other support. 

Local Trust has explored the support provided to Big Local partnerships in another article, along with an article about how Big Local built the skills and confidence of residents. Local Trust also explores the role of reps in Big Local, and how networking was supported throughout the programme, in other articles.

The range of organisations chosen as Locally Trusted Organisations (LTOs) reflects the importance of local networks of community and voluntary organisations. Organisations had to meet four criteria set by Local Trust: they had to be formally constituted; they had to have the experience and capability to administer and account for funding; they had to have capacity to support the Big Local partnership; and they had to have a bank account with at least two unrelated signatories. 

Local charities or Councils for Voluntary Service (CVSs) were the main form of LTO throughout the programme, being the LTO in 72 per cent of Big Local areas in 2013 (James et al., 2014). Housing associations, local authorities, and other local organisations (like schools and GP practices) also featured. Even though many LTOs had similar backgrounds in the charitable sector, a wide variety of organisations were involved. Towards the end of the programme, of 140 active LTOs: 

• 32 were Councils for Voluntary Service (CVSs)
• 40 were ​‘other local charities’ 
• 18 were not-for-profit companies
• 11 were housing providers
• nine were community centres
• four were for-profit businesses
• two were local authorities. 

Community foundations, parish councils, schools and faith organisations also featured. 

Reasons for choosing a particular organisation as a LTO included their experience in financial management, their networks, levels of trust, the organisation’s location, and its independence. Occasionally, when no suitable organisation could be found locally, Local Trust performed the LTO role on a temporary basis and advised on potential organisations. Big Local partnerships also tended to choose organisations aligned with the capacities and skills they needed for community development and project management. 

Local Trust has explored partnerships taking on the LTO role in an accompanying article, looking at how effective the LTO model was in supporting community-led work.

Most LTOs were based outside the Big Local areas even if their patch included the Big Local neighbourhood – perhaps indicating a lack of local organisations in many of the Big Local areas at the start of the programme.

Some of the first 50 partnerships (established before Local Trust was set up) turned to LTOs to help guide them through their initial decisions while they built confidence. Some LTOs felt they had to ​‘smooth edges’ or ​‘push residents to the fore’ to move towards genuinely resident-led partnerships (Walsh and Golden, 2014). It sometimes took a while before residents felt they were in control, and often this was facilitated through quick wins, like working with the LTO on events or outreach. 

Some LTOs began employing workers and delivering projects from an early stage, faster than Local Trust expected. This sometimes created tensions, as Big Local partnerships and LTOs had different views of resident-led decision-making, with residents feeling like LTOs were setting the agenda (James et al., 2014). 

Residents particularly valued the LTO model in the early stages of the programme, as it provided resources, administration services, and access to networks – at the time 69 per cent of partnership members thought it was helpful or very helpful. They were happy that LTOs were responsible for reporting to Local Trust, and they especially valued access to local networks (James et al., 2014).

However, there were a few challenges, including disagreements over responsibilities, and views that some LTOs were overstepping or exerting influence on the pace or scope of progress. Sometimes this was seen as a clash of cultures or values. Some areas struggled to find a suitable LTO, while in one case a LTO had to close because of financial problems. Partnerships could also decide to end a relationship if it was not meeting their needs and several did. A few partnerships changed LTO at an early stage, either through mutual agreement (where the area’s needs changed) or because the working relationship did not work out (James et al., 2014). At the same time, the wider national context of austerity from 2011 resulted in a loss of organisations and skilled individuals in community development, who might otherwise have been able to act as LTOs.

As the Big Local programme matured, more LTOs took on wider roles. By 2021, one third of partnerships were contracting their LTO to provide services beyond their core functions (Local Trust, 2021). This resulted in an increased variety and complexity of roles, and Local Trust began providing a regular LTO newsletter, reminding them of their role and responsibilities, and sharing updated programme guidance. 

As the complexity of relationships between partnerships and LTOs increased, it became harder to differentiate roles and responsibilities, creating challenges in managing risk and tensions over the 5 per cent contribution from Local Trust (Dobson et al., 2022). This led to a greater emphasis within Local Trust on providing effective support to LTOs. Meanwhile a few partnerships took on LTO responsibilities themselves (Dobson et al., 2022). Sometimes this was because of challenging relationships with LTOs, but often it was because their vision and plans were evolving and they wanted to create an enduring legacy. 

As the programme ended, LTOs had to ensure funds were spent and were involved in decisions about partnerships’ continuity or closure. This included responsibilities of staff transfer or termination, conclusion of contracts, and asset transfer or disposal. Some LTOs merged with partnerships to set up a new organisation or supported partnerships to become independent local charities or social enterprises. 

Local Trust has explored the evolution of partnerships in an accompanying article, looking at how effective the LTO model was in supporting community-led work.

Big Local and the LTO model were conscious attempts to learn from previous community development programmes. The triangular model of Local Trust as programme manager, LTOs as local fundholders and unincorporated resident-led partnerships was uncharted territory and so generated new challenges as well as responding to old ones. 

The LTO model required all involved to work in equitable and respectful partnerships. Residents were ambitious, often wanting to go further and faster than turned out to be possible – in part due to a lack of experience working with stakeholders and systems to deliver on their ideas, like building local assets. Payments from Local Trust to LTOs could be delayed if money was not spent when originally anticipated, as they were paid according to actual rather than planned spend by partnerships. This meant that, while LTOs did not lose out on payments, they were affected by delayed payments – the time between undertaking activities to support residents and receiving full payment in return could be lengthy. 

A mismatch of knowledge and experience between LTOs and resident members of partnerships enabled some LTOs to exercise greater influence than intended. On the other hand, it also provided residents opportunities to tap into years of experience: the predominance of third sector organisations among LTOs reflected the importance of civil society networks and values that had been built up over decades of regeneration programmes and activities.