Charities Clear the Decks

From Progress Online, April 2011

With the new financial year third sector organisations are clearing the decks. Key organisations like NCVO and the Charity Commission are being forced to say goodbye to significant numbers of experienced staff whilst others like the Commission for the Compact are being abolished. In communities all round the country council staff working with those already providing local services on a voluntary or contractual basis are meeting their contacts and service users for the last time.

Indeed, a most worrying aspect of what is happening is the huge number of voluntary organisations who no longer know the name of their commissioning officer in their local authority, a huge concern for the future provision of localised services.

Did the budget help? No. Superficially attractive policies like reforming Gift Aid and making more of legacies don’t bear great scrutiny. Reducing inheritance tax when ten per cent of an estate is left to charity (when only three estates in a hundred pay IHT) won’t generate very much and it doesn’t start until next year. And though it will be useful to claim Gift Aid on unattributed donations from collecting boxes there’s a cap of £1,250 per charity (that’s the Gift Aid reclaimable on £5,000 of donations), you have got to have already claimed Gift Aid for three years and the value of Gift Aid went down this month from 28p in the pound to 25p.

On the more positive side, well done the Department of Health! Their £7 million top-up of the Cabinet Office’s £100 million ‘transition’ (i.e. sticking plaster) fund will help to offset the £3+ billion shortfall in the public funding of charities’ work this year.

But disappointing news from the DWP. Ministers’ assured us that their programme to help unemployed people find work will be a massive opportunity for third sector organisations to scale up, deliver real benefit to people and make the Big Society a reality. With experienced providers such as Groundwork and the Shaw Trust in the running and 40 contracts to hand out, this week was surely the test.

Only one not-for-profit was named as a prime contractor – two if you count the Irish charity Rehab which won a contract jointly with a private sector partner. The rhetoric does not match the reality.

The good news (yes, really) is that DEFRA is consulting on British Waterways becoming a charity, the first major transfer of an organisation from public sector to third sector. It’s an exciting and welcome innovation which Labour instigated – but the devil may still be in the detail.