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Grant-makers in the culture, media and sport sector fund awards of around £1.8 billion a year. The cost of administering these grants, and of related activities, is in the region of £200 million. Variations in administration costs between grant programmes reflect their differing objectives but also suggest scope for grant-makers to learn from each other to reduce their costs, according to a report out today by the National Audit Office.

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Today’s report found that grant-makers need to identify where the costs of grant-making are incurred and to evaluate whether the costs of awarding grants are proportionate to their value and the outcomes delivered.

Grant programmes vary considerably in scale and objectives. Of the programmes examined by the NAO the average cost of making an award ranged from £380 to nearly £10,000. Costs were highest where the grant-maker undertook significant work to help potential recipients develop applications or where they employed experts, such as surveyors and architects to support high value building projects.

Grant-makers receive more applications than they can afford to fund. The report found examples of grant-makers improving the management of demand to reduce the number of inappropriate or low quality applications. Grant applicants reported generally high levels of satisfaction with the applications process. A particular strength of grant-makers is the knowledge of their staff. However, the availability of feedback and information about the decision-making process are areas that grant-makers could improve.

The report concludes that there is little co-ordinated or regular sharing of information on the costs and processes of grant making across the sector. For example, grant-makers have developed and implemented their own IT systems and there is little evidence that the lessons learned have been shared.

“Grants awarded in the culture, media and sport sector support a diverse range of programmes, from funding education schemes for children to getting more people involved in sport. Grant-makers do, however, need to get a better handle on the costs and efficiency of their grant making if they are to demonstrate that as much of the money as possible goes into cultural and sporting activities rather than on administrative overheads.”

Tim Burr, head of the National Audit Office

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