As the new financial year begins, voluntary sector funding has been thrown into turmoil yet again. Family Service Units, which has worked with deprived families for more than 50 years, has gone into administration and will have key services taken over by the Family Welfare Association. FSU is one of chancellor Gordon Brown’s favourite charities and it will be little consolation to him that the public sector contracts he has done so much to promote are among the main reasons for the debacle. The charity’s chief executive Philippa Gitlin warned last summer that the reform of local authority children’s services would have grave implications for voluntary groups that contract to provide these services. She has been proved right.
The transfer of Sure Start and Children’s Fund money to local authorities was always going to be tricky, given the prominent role of the voluntary sector in providing the preventive services it was intended for. But what should have resulted in a few hiccoughs seems to have produced near-paralysis among some council commissioners, where either a determination to keep services in-house or sheer indecisiveness has had a destructive impact.
FSU has also had to contend with a pensions crisis, but it has not had to suffer its funding problems alone. It gets 75 per cent of its funding through contracts, a dependency on the state which is far from unusual in a sector that has been encouraged to deliver more services. The government has regularly called on the voluntary sector to build capacity and develop a more professional approach to contracts, yet the public sector has all too often failed to practise what it preaches. Far too many charities, including FSU, have been forced to top up the cost of contracts – “full cost recovery” is still a distant prospect despite the government’s apparent advocacy of it – and the mess the Department of Health has made of this year’s section 64 grants is a scandal.
Luckily, the FWA has been able to salvage much of the good work done with families by the FSU because the two organisations have generally complemented one another. But luck is not enough where the care and support of families depends on it. If the voluntary sector is to become an equal partner, the funding mess must be sorted out.
See Family Service Units in administration