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The Scottish Executive is injecting £18m into the country’s most deprived communities allowing voluntary and community organisations to bid only if they are commercially competitive, announced the Scottish Executive, writes Shirley Kumar.

In an attempt to change the investment culture of the sector, the Executive wants organisations to become “self sufficient businesses,” where they are able to make a profit that will be reinvested back into the communities they serve.

It hopes to help 500 organisations develop their services over a two-year period with greater emphasis on allowing the sector to gain equal access to service delivery contracts.

Priority will be given to projects that will regenerate the most deprived communities in Scotland and services for and run by young people.

Scottish Executive communities minister Margaret Curran said: “I’m clear this is not about handouts for failing businesses, or for giving one sector preference over another. It’s about laying out a structure of support to drive forward progress and about supporting those who really deliver on the ground.”

The funding will be managed by a new Social Economy Unit under Communities Scotland and is expected to be available from October.

It includes a £16m Direct Investment Fund, with £12m allocated to medium to large sized organisations. Around 70 per cent of the fund will be devoted to capital investment projects, which will allow organisations to gain access alternative sources of funding.


A £4m Seedcorn Fund will allow smaller, community focused organisations to develop their services and the Social Entrepreneurs Fund will provide grants of up to £5,000 to enable individual entrepreneurs to turn local ideas into live projects.

Around £1m has also been allocated for training and £1m to fund a support programme.