Contingency and inflation

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Hi all

I am interested to know how other LPS's have approached their contingency budget. We (Land of Oak & Iron) are fast approaching our final year and although we have yet to show enough spend on our main budget, we are starting to look at contingeny where there is a shortfall under specific project headings such as ensuring sufficient staff cover for the final three months.

I am of the understanding that contingency cannot be used unless a very good case is made? This then impacts on the Accountable Body being able to re-coup all of the core costs. 

Simailarly inflation - how have other LPS's claimed inflation?

Thanks, 

Karen 

karen.daglish@groundwork.org.uk 

 

proffil Karen Daglish's Karen Daglish Nov 22 2018 - 3:24pm
  1. Hi Karen

    this was our experience at Touching the Tide; Inflation was money HLF expected us to spend, and actually formed quite a useful pot of flexible money given that with good procurement, things should come in under-budget more often than over-. So we could just spend it on more good stuff!

    Now under the new regime inflation is a separate HLF budget line, so presumably you have to ask permission to spend it on anything other than “inflation” - which makes sense for eg anything other than “office costs” but since inflation isn’t actually a thing they should logically just allow you to spend it on whatever’s needed.

    HLF were pretty pragmatic and flexible with our TtT budget anyway.

    Contingency is for unplanned overspend/cost overruns on existing commitments.  It’s not for new or additional work and it is money that, in principle, HLF do not intend to spend if all goes according to the plan. So if I were HLF, and you had other projected underspends, I’d expect you to draw on them first (by getting permission to move budget around between spend categories to create more staff time) before you tapped into contingency to fund it.

    You’re in a different situation however if you have don’t have underspend so much as work that is behind schedule – (everyone does near the end of their project by the way!).  If you don’t think budget will ever be spent, you can redirect it, but if you still think it will be, then its perfectly reasonable to call on contingency to cover additional costs elsewhere. If you have work that will take longer than planned to be delivered and are looking to cover the staff costs of an extension to get it all done, then that is an entirely legitimate need for contingency spend.

    Historically HLF have often been happy for people to spend contingency on additional work anyway at the end of projects (but NB you always required their explicit agreement to do so). In the new financial climate though they may indeed want it back unless you have real need – you can only find out by asking.

    And yes, if you don’t spend your contingency that does mean that the actual HLF percentage contribution will be less than the headline one. That’s just how it works. ☹

  2. proffil Bill Jenman's Bill Jenman
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  3. in reply to

    That's really helpful, thanks Bill. 

  4. proffil Karen Daglish's Karen Daglish
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  5. Hi Karen,

    On Black to Green, we have spent both Inflation and Contingency. I've dealt with it by emailing the Grants Officer with the reasoning to get approval. I've then included the email correspondence as an attachment to the claim and put a bit of narrative in the 'Changes' large box on the Progress Report.

    Hope that helps,

    Bethan

  6. proffil Bethan Scragg's Bethan Scragg
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  7. in reply to

    Thanks, do you mind if I ask what you spent the two budgets on? Delivering the LCAP or something new?

    Karen 

  8. proffil Karen Daglish's Karen Daglish
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  9. in reply to

    Hi Karen,

    Inflation we spent on increased costs incurred to build a bird hide and sand martin which was part of the original bid. Contingency was used to add works to our original interpretation project to make it a higher quality project. However, the steer from our Grants Officer was that they weren't expecting any contingency funds back. We, therefore, totted up all of our budgets and worked out what we left from underspend including contingencies. We then came up with an outline of what we wanted to spend that on (new things, but still meeting Approved Purposes), and got email approval from the Grants Officer. Some of this went on the legacy planning work.

    NB - We're not officially a Landscape Partnership project, but were a pilot approach to run as a three year pre-cursor to a Landscape Partnership project, and so have always affiliated with LPs.

    Best of luck,

    Bethan

  10. proffil Bethan Scragg's Bethan Scragg
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  11. Hi Karen

    We have contingencies, inflation etc in our North Isles LPS project budget from HLF and we are relatively new so we've not spent any of this yet and I've not thought really hard about it, but when I look at it in the budget as a separate heading in my mind the challenge is that if my other funders don't agree it or support contingency (some don't) in their grant offers, if I spend the HLF contingency I'm not going to get it all back in my claims, so I can't spend it anyway. Unless I misunderstand it. 

    Sorry that probably doesn't help you!

    Andy. 

        

  12. proffil Andrew Golightly's Andrew Golightly
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