Tories must come clean on cuts to voluntary sector

Our guest writer works in the voluntary sector and has asked to remain anonymous

There was a time, almost three years ago, when the Tories came close to doing some radical thinking on the role of the third sector – even if they were, and are, far happier passing the time talking about what the sector should be called (social sector? non-profit? civil society?) as opposed to liberating it to deliver more effectively. Of course any charity worth giving money to is far too concerned with delivering change to even know that such debate even exists. There’s nothing more yawn-inducing to serious activists than David Cameron’s oft-repeated line, “I hate the term third sector because in my book you are often the first sector”; it’s focus-group flattery at its worst.

But every now and then they have hit upon a good idea. Take this one from their green paper on the third sector: charities delivering public services by contract should be allowed, even encouraged, to make a surplus. Surplus is charity-speak for profit. This would indeed be an innovation, as charities by law must reinvest any surplus in either delivering services or developing innovations that will help them achieve their charitable endeavor. It’s a win/win for the taxpayer, who can rest assured that profit as a reward for success won’t be whisked off to appease distant shareholders but instead be invested in social innovation.

As a prelude to more recent and larger announcements, this one quickly began to be picked apart though. Not in the principle, but in the Tories’ willingness to deliver it. I was in an audience when someone pointed out to Nick Hurd, the shadow charities minister, that they did not have to wait until taking power to deliver this pledge as the majority of money into the sector comes via local authorities, and the Tories controlled more than 60 per cent of them. They could deliver this policy the next day! But to my knowledge not a single local authority has encouraged third sector providers to price a surplus into their bids to run services.

Indeed, the only evidence emerging from Tories in power is that they are using the third sector as the first whipping boy in a relentless and neanderthal approach to making savings. Take Westminster city council, which in the last few days lopped £500,000 off the funding to the voluntary sector and followed this with a right-hook in the form of expelling charity representatives from their seat at the top table – the consolation prize of a powerless advisory role within the council without voting rights is nothing more than an insult to the very people closest to vulnerable people and communities in times of great hardship and crisis.

Similar practices emanating from the London Mayor’s office are well documented.

To be clear, no one sensible is saying that the third sector should be ring-fenced carte blanche from any spending cuts. Indeed, if engaged properly they are capable of delivering more services at a lower cost using radical and highly innovative practices, often employing partnership models and volunteerism in ways that statutory services can only dream of. This makes the short-termism of the Tories in power all the more galling, as it simply will not benefit anyone – service user or taxpayer alike – beyond the end of this financial year.

Just as worrying, the Tories are increasingly divorcing the different factions of their Party according to policy approaches. Take Iain Duncan Smith, who thinks that small charities are the answer to everything, coupled with a bigotry towards those who are either large (what he calls the Tesco-isation of the sector) or take contracts (which can often be similar in terms to grants but have the potential, if well negotiated, to offer long-term financial security and protect against raids and cuts by a hungry funder). Then on the other extreme you have Francis Maude and Stephen Dorrell who believe that large charities can solve nationwide problems and standardise quality of provision across geographic and regional boundaries.

This close to an election, a credible party would have bridged this divide, banged heads together, brought the policy thinkers together to plot a unified narrative. But instead the Tories have allowed the different wings to diverge, and I believe they will institutionalise this divide should they win the election.

Word is that IDS will get his much coveted department for social justice, whose job will be to moralise on the benefits of marriage on the one hand and extoll the virtues of communities solving their own problems through voluntary action (and in his book that means free of regulation and financial support from government) on the other. And then Francis Maude at the Cabinet office grappling with the challenges of public service reform and doing his best to harness the power of charities large and small whilst providing demonstrable evidence of outcomes to deliver to the public when tough questions are asked. Perhaps this fracture will see social enterprise dispatched back to the department for business, innovation and skills. This would in my mind institutionalise the conflicts within Tory thinking rather than bring them together to offer the third sector clarity and certainty.

Some of that is speculation – how can we know what the Tories will do in power when even they haven’t figured it out – but based upon the salami-slicing of Westminster, it seems that the days when charities can expect to profit from solving society’s (and government’s) most intractable problems would be delayed, not expedited, by a Tory victory in May.