Public services and Charities

I don’t know whether charities can contribute any more than they already do in relieving the burden of public expenditure. Many charities compete effectively to deliver public services in different spheres of life. As many of these charities are publicly funded it seems to me that the question is not how further savings can be made to the public purse but who gets to decide what the funds are spent on. Is there really that much difference between a charity delivering a service or a government department delivering that service?

The question of whether charities should be expected to take the burden of providing public services has always divided commentators into two camps. Those who think that charities should gear up and develop capacity to deliver public services becoming part of the mainstream public sector, and those that think charities should supplement service delivery rather than help out with what are statutory obligations on authorities to provide those services. The question is, in giving the funds to charity will that mean that less gets spent? If this is the perception of the government it may be illogical. There is a minimum level of spending below which the charities will have to supplement the funding out of other reserves. I’m not sure if this means that the government are looking to charities to prop up a failing public service, or that the government believes that charities are more efficient at the delivery of services than government bodies. The perception within the sector is that the government has failed to comprehend what it is charities are being asked to do. The demand for charity services has increased simultaneously with the recent cuts in funding.

Of course the trend over recent years has been unfailing in advancing public service delivery via charities. The issue became highlighted by the Trafford Community Leisure Trust case and the Wigan Leisure and Culture Trust. The Charity Commission found that there was no objection in law to local authority charities undertaking public services of whatever nature. Prior to these cases the view was that charities should not undertake mandatory duties on behalf of local authorities but could undertake the discretionary duties of the authorities.

Since then the pace of change has been rapid and the sector has largely benefited from expansion into areas such as health care, social services and other areas often less noticed – such as the recent formation of the Waterways Trust to look after the inland waterways of the country. The ideas have not been one way only though and studies into the transfer of public assets to trusts have suggested that this may be a means of releasing assets to communities allowing charities to run small community led service delivery.

At the NCVO annual conference it was noted that almost everyone seems to think the final 5% of flesh can be cut from the bone. He said that this is the voluntary sector equivalent of boiling the bones from the Sunday roast to make soup on Monday. Further uncertainty was being created by the Health and Social Care Bill and funding cuts had their greatest impact on the most deprived areas which were most reliant on public funding. Sir Stuart Etherington suggested that there was now very little, if any, fat to trim. He also pointed out the difference between the contract culture and grant funding. Much of the preventative work of charities is grant funded and the dwindling supply of grant funding was counterproductive as the result was simply more acute problems which still had to be addressed but in the form of service contracts. Within the voluntary sector there is therefore a need for a diversity of funding rather than a shortsighted concentration on service provision by charities under contracts. This concentration on charities providing services also led to allegations of “fake” charities which behave more like preferred business suppliers than charities.

The NCVO also produces papers within its guidance concentrating on Public Service Delivery. The papers include discussion papers and advice on how to access funding. Advice on when and how to use procurement consortia is available but the overriding tone of all the papers is that charities must concentrate on efficiency, economies of scale (both in purchasing goods and in producing economies of process – division of labour of you like) to produce value for money and to ensure that funding is not wasted. Of course one weak area for charities is that payment may only be by results, and unless there is an agreed method, or parameters for measuring results, charities may suffer in the next funding round. The purpose of such payment may be to improve service quality and the transparency of where those funds have actually been applied but this may well backfire.

The real issue may be that government bodies (local or central) might not be the best bodies to spend the funds, however in transferring their functions to the charity sector they must be realistic as to just what can be achieved by the sector. The two extremes are demonstrated by the recent cases of the Knotty Ash Special School Trust and the Immigration Advisory Service. In the first case the Council was the sole Trustee of charitable lands but admitted that it had failed, in breach of trust, to pursue the charity’s rights which resulted in wasting funds of approximately £90,000 and in there being very little charitable activity at all. There was no increase in efficiency or activity in this case. In contrast the Immigration Advisory Service was the largest provider of publicly funded immigration and asylum advice. Government reforms and cuts meant that the charity’s income reduced so sharply that it simply could not continue. It has to be asked whether or not the cessation of funding to such a service provider was deliberate policy or not. How else did the government imagine that the service could continue? I suspect that the government may be transferring service contracts to charities for lesser funding in the hope that the resourceful sector might “step up to the mark” and that vital services will not be diminished or reduced but the funding may be.