The Cabinet Office estimates that government commits around £130 billion to grants each year – nearly 20% of all government spend. Grants are an important delivery mechanism for policy across government, not just centrally but also in agencies, local authorities and other bodies across the public sector.

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Competitive and demand-led grants are grant schemes which are targeted at specific beneficiary groups and where the beneficiary applies for the grant. Such schemes can be especially challenging for grant administrators as there are many unpredictable factors at play, including external factors such as market forces, and internal factors such as forecasting supply and demand. These schemes typically have a relatively high number of recipients and award small amounts of money and, as a result, can be expensive to run, have a high risk of fraud, and limited ability to determine the effectiveness of resulting outcomes. Many of the problems encountered in this type of scheme also apply to loan schemes.

Sue Higgins, NAO Executive Leader says:

“Today we are launching a good-practice toolkit on competitive and demand-led grants. The toolkit is aimed at supporting grants administrators when delivering grants programmes, as well as SROs who want a framework by which to gain assurance on grants they are responsible for. The toolkit will also be used by us and other auditors and evaluators when we audit such programmes.”

Lesley Hume, Cabinet Office Executive Director for Fraud, Error and Debt says:

“With this good-practice guide, the NAO are making a further key contribution to this important agenda. I am very grateful to the NAO for the collaborative way in which they have developed this guide, ensuring that it carefully complements the guidance and products we are making available to grant makers. I strongly urge all departments to take advantage of this expert guidance so that we can make real improvements to grant making and ensure that we deliver value for the taxpayer.”