Groups wilt rather than flower

Local government minister David Miliband (pictured) claimed last month that the voluntary sector was experiencing a period of “unprecedented flowering”, but recent reports have put his rhetoric to the test.

Miliband said a “double devolution” of power from “Whitehall to the town hall, and from the town hall to citizens and local communities” would open up a “major opportunity” for the sector. Opportunities to deliver public services should be open to small and medium-sized organisations as well as larger charities, he added.

But a report last week from the House of Commons public spending watchdog called into question Miliband’s vision and slammed Whitehall’s “lack of expertise” in dealing with the voluntary sector (Role of charities stymied by red tape, 2 March). The Public Accounts Committee found “burdensome” bureaucracy and short-term funding were deterring organisations from working with government programmes. It also said the government had made “limited progress” in increasing voluntary sector involvement.

Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations (Acevo), says the report “confirms what our members are saying”.

The National Council for Voluntary Organisations’ (NCVO) biannual almanac raised further concerns, showing that, although some charities are “flowering”, many are not. The almanac revealed that 14 “supercharities” generate £2.5bn a year – nearly 10 per cent of the sector’s income – while more than half the organisations survive on less than £10,000 per year (Children’s charities among top earners, 2 March).

Charities in the £10-100,000 annual income band suffered the sharpest decrease in income from 2002-3 to 2003-4, of about 10 per cent.

The NCVO warned this “concentration of resources” on a small number of organisations was “becoming more acute over time”.

The reports raise questions over how much progress has been made since the Treasury’s  cross-cutting review of 2002. Hailed as a “blueprint” for transforming the government’s relationship with the voluntary sector, it pledged to fund the full costs incurred by charities in providing public services.

The Public Accounts Committee found many of the contracts could be renewed yearly, leading to uncertainty over sustainability. Many organisations received funding late, it added, and it cited the government’s “slow progress” in implementing full cost recovery.

This echoed the concerns of a National Audit Office report last year which found the government looked like missing the target to meet the Treasury’s deadline for statutory funders to implement full cost recovery principles by April 2006.

The committee’s findings were supported by  an Acevo survey, published last month. This found that 97 per cent of voluntary organisations believed statutory funders were “unlikely” to meet the Treasury deadline.

Target warning
Acevo warns that failure to meet the target will cause serious problems for the voluntary sector, and is concerned that cost recovery principles outlined in the 2002 review have not filtered down through local authorities.

This point is backed by another recent survey, by the British Association of Settlements and Social Action (Bassac), which represents 100 small community organisations. It found that a “contract culture” imposed by  government was forcing organisations to become “service delivery agents” and that community groups were not being sufficiently resourced.

Susan Spencer, head of Birmingham Settlement, a Bassac member, says: “What is happening on the ground is at odds with the government rhetoric on civil renewal and active citizenship. Organisations like ours are well-placed to deliver on these agendas, but this will be impossible if our funding is dependent on us promising to deliver at a price that is lower than the actual cost.”

The committee has called for an extension of the government’s target to increase voluntary sector involvement in public service delivery by 5 per cent from 2002 to 2006.

But NCVO chief executive Stuart Etherington says the government should be doing more to strengthen its relationship with the voluntary sector. “It is important that government gets the conditions for public service delivery right, rather than simply sets new targets,” he says.