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.

Photo: Getty
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The campaign to keep Britain in Europe must be based on hope, not fear

Together we can show the world a generous, outward-facing Britain we can all be proud of.

Today the Liberal Democrats launched our national campaign to keep Britain in Europe. With the polls showing the outcome of this referendum is on a knife-edge, our party is determined to play a decisive role in this once in a generation fight. This will not be an easy campaign. But it is one we will relish as the UK's most outward-looking and internationalist party. Together in Europe the UK has delivered peace, created the world’s largest free trade area and given the British people the opportunity to live, work and travel freely across the continent. Now is the time to build on these achievements, not throw them all away.

Already we are hearing fear-mongering from both sides in this heated debate. On the one hand, Ukip and the feuding Leave campaigns have shamelessly seized on the events in Cologne at New Year to claim that British women will be at risk if the UK stays in Europe. On the other, David Cameron claims that the refugees he derides as a "bunch of migrants" in Calais will all descend on the other side of the Channel the minute Britain leaves the EU. The British public deserve better than this. Rather than constant mud-slinging and politicising of the world's biggest humanitarian crisis since the Second World War, we need a frank and honest debate about what is really at stake. Most importantly this should be a positive campaign, one that is fought on hope and not on fear. As we have a seen in Scotland, a referendum won through scare tactics alone risks winning the battle but losing the war.

The voice of business and civil society, from scientists and the police to environmental charities, have a crucial role to play in explaining how being in the EU benefits the British economy and enhances people's everyday lives. All those who believe in Britain's EU membership must not be afraid to speak out and make the positive case why being in Europe makes us more prosperous, stable and secure. Because at its heart this debate is not just about facts and figures, it is about what kind of country we want to be.

The Leave campaigns cannot agree what they believe in. Some want the UK to be an offshore, deregulated tax haven, others advocate a protectionist, mean-hearted country that shuts it doors to the world. As with so many populist movements, from Putin to Trump, they are defined not by what they are for but what they are against. Their failure to come up with a credible vision for our country's future is not patriotic, it is irresponsible.

This leaves the field open to put forward a united vision of Britain's place in Europe and the world. Liberal Democrats are clear what we believe in: an open, inclusive and tolerant nation that stands tall in the world and doesn't hide from it. We are not uncritical of the EU's institutions. Indeed as Liberals, we fiercely believe that power must be devolved to the lowest possible level, empowering communities and individuals wherever possible to make decisions for themselves. But we recognise that staying in Europe is the best way to find the solutions to the problems that don't stop at borders, rather than leaving them to our children and grandchildren. We believe Britain must put itself at the heart of our continent's future and shape a more effective and more accountable Europe, focused on responding to major global challenges we face.

Together in Europe we can build a strong and prosperous future, from pioneering research into life-saving new medicines to tackling climate change and fighting international crime. Together we can provide hope for the desperate and spread the peace we now take for granted to the rest of the world. And together we can show the world a generous, outward-facing Britain we can all be proud of. So if you agree then join the Liberal Democrat campaign today, to remain in together, and to stand up for the type of Britain you think we should be.