Official policy or preference?

Question

Is there a rule that says the only way a PC can fund something is if they have full control and management of the service to the community or if a grant is given?  I refer to a non-essential but very important part of the local community - NOT things like mowing and streetlights etc.
In a previous PC meeting (various iterations of the PC ago), an agreement was reached between a community service provider and the PC.  A motion was raised and passed to fund the community service.  No other work would be required, just paying the bill when it came in 6 times a year.  The provider would retain it's independence; free from influence or control by the PC.
The service has been well managed and is financially accountable - providing evidence of income and expenditure to the PC who pay the only expenditure directly to the provider - exactly as the village had voted for in the annual meeting.
Now, after 18 years of happily providing the service under this arrangement, the PC have informed the provider that either the service has to move under the PC, is managed and controlled by them through policy and framework or that the service goes financially independent and applies for an annual grant.  The former is not desirable as the agreement specifically relied on the independence of this service and the service is reliant on this freedom to maintain it's integrity to the community.  The latter is not realistic because any grant is likely to be rejected by some vexatious Councillors who want to control the service and will introduce frameworks and conditions that are not applied to any other grant recipient.

Is funding community projects only possible using one of these two models?  Has anyone else had a situation where the payment is made direct to the provider but in the absence of management or control over the provider's service?

Answer 1

Firstly I should preface my response by saying that I am familiar with parish and town councils rather than larger principal authorities where the operating environment differs.  The solution you seek may well be feasible in a larger principal authority but for town and parish councils the usual financial regulations would suggest a couple of possible scenarios.
Firstly it is not unusual for a parish council to engage a contractor to operate/run a service.  Good governance on the part of the council would expect that contract to be regularly reviewed and a retendering process to take place every few years or so.  An 18 year contract would without review would possibly be considered poor governance by auditors.  Invoices would be sent by the contractor periodically and paid by the council.  This sounds as if this is the arrangement you have with your council and is the way most councils would work with a third party to deliver a service to the population.
It is not unusual for a larger council to want to take a particular contract or service "in house", i.e. to deliver that service through its own staff albeit TUPE may apply (depending upon the circumstances).  It is not a legal requirement to take on a service previously delivered by a contractor but a decision of councillors.
Without details of the service provided your post implies this is not a commercial operation but something delivered by a charity or community group?  In which case, funding via a grant system is similarly quite common and again a decision of the council presumably with grant terms and conditions in accordance with the council's grant policy.

It's difficult to give a definitive answer with the information you've provided but the bottom line is that parish councils are generally free to make their own decisions but a lifetime agreement does not usually form part of that business plan.

Answer 2

It’s been running for 18 years without review?

Vexatious Cllrs you say?

Is it possible that long standing apathy and incompetence has been replaced by a more engaged and questioning cohort of Cllrs?

Nothing agreed by a previous council binds a later council and so - at the very least - any arrangement should be subject to 4 yearly review but more realistically, grants should be reviewed ANNUALLY.