Last rites for the “big society” as charities join the critical list

“It’s an idea built on sand.”

So, there's the rub. The spending cuts, coupled with a huge drop in income, have left the charity sector dangerously exposed just at the moment ministers talk of handing over service provision.

The National Council for Voluntary Organisations (NCVO) issued a bleak survey this week showing tht confidence levels in the voluntary sector's financial future are at an all-time low. Respondents also demonstrated low confidence in their organisations' general situation and finances. It reported:

97 per cent of charity leaders expect economic conditions within the sector to be negative over the next 12 months.

The key findings are grim:

  • 35 per cent plan to decrease the extent of services they offer during the next three months.
  • Over half (53 per cent) of respondents said that their organisation's financial situation had worsened over the past year.
  • 55 per cent said they planned to reduce staff numbers over the next three months.
  • 64 per cent of respondents felt that the general situation of their organisation would get worse over the next 12 months. This is an increase of 3 percentage points since the previous quarter.
  • 83 per cent of respondents felt that economic conditions within the UK as a whole will be negative over the next 12 months.

These are significant numbers: the latest Labour Force Survey figures for the fourth quarter of 2010 show that the voluntary sector employs 793,000 people, the same figure as reported during the previous quarter.

The hope for charities had been that the "big society" would end the era for charities of piecework and grants that lasted a maximum of three years. What the sector admitted this week is that the dream has died.

Most charities won't be able to scale up or have the staff capacity to meet the challenge of running services, let alone modernise them.

They had already suffered a drop in income from donations because of the downturn. That is critical, because most charities have incomes of less than £100,000 a year. Even in 2002, back in the good times, more than 42,000 had an income of £1,000.

That's before interest rates on current accounts dropped to the level they are now, VAT, fuel and the rest.

Imagine you're running a lunch club in Gateshead for 30 older people. Membership costs can't go up, but your costs do and the value of any assets will have sunk.

Income usually comes from revenue (yes, those coffee mornings), investments (if you're lucky), donations and legacies.

But people are living longer, the value of their estates has been hit by the recession (the drop in house prices) and many are having to pay for end-of-life care out of their estate.

Research last year by the Cass Business School on 20 leading legacy-earning charities, which together attract more than two-fifths (42 per cent) of all charitable legacies, shows that there was a real annual fall of 3 per cent in their legacy values in 2008-2009.

Ironically, those same people are those most likely to turn to charities for help, particularly for assistance with their care or support through initiatives such as befriending services.

A little-seen announcement by the Care Quality Commission this week revealed that councils have cut the number of people whose care they will fund – adding to the problems.

More older people will be unable to donate, the charities providing care services are going to be squeezed even harder and demand for them to step in will rise.

This is partly why the Association of Chief Executives of Voluntary Organsiations (ACEVO) wrote to councils this week, asking for reassurance that even in the toughest of financial climates the voluntary and community sector won't be treated unfairly. They don't have much hope.

Part of the problem is the early settlement made with the Treasury by the Ccommunities Secretary, Eric Pickles. It resulted in 28 per cent budget cuts for councils which will be front-loaded. Pickles helped kill the PM's "big society" initiative before it even got off the ground.

And old issues remain unsolved. The cost of tendering for public-sector contracts is still a problem, the Cabinet Office admits. Small charities are up against major PLCs with dedicated bidding teams. The promise of future cash streams remains exactly that.

One respondent to the NCVO report warned:

The idea that the Big Society will provide all the answers is built on sand, as many of us will fold and simply not be there to provide the support for individuals disadvantaged by current cuts.

The only remaining question is: where will the wake for David Cameron's grand design be held?

Chris Smith is a former lobby correspondent.

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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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