Socialist Worker

Why are the big charities involved in public services?

The growing involvement of charities in public services is harming those who rely on both, writes campaigner Bob Holman

Issue No. 2057

Britain has a long tradition of charitable voluntary bodies. Having visited many of their local projects, I admire their dedicated staff. But the structures and policies at the top mean there are elements which reinforce capitalism, the class system and inequality.

The voluntary sector is changing. Of 165,000 charities, an elite of 18 gets an eighth of all charitable income.

These super charities include the National Children’s Home (annual income £200 million), Barnardo’s (£200 million), Save the Children (£132 million), Mencap (£132 million) and the NSPCC (£112 million).

The gap is rapidly widening between them and the 60 percent of smaller voluntary bodies who get just 1.4 percent of all funding.

Where do the big boys get their money? Partly from public donations and charitable trusts. But now between 50 and 98 percent comes from statutory bodies, mainly in the form of contracts.

I believe they can justly accept state funding for high quality services of the kind they have pioneered – provided it never becomes the bulk of their income.

The difference now is that they are bidding for contracts to take over public services which have long been the responsibility of the state.

The contract culture has provoked a range of criticisms.

First, a loss of independence.Researcher Nick Seddon calls it “mission drift” as the large voluntaries give less attention to their original aims and more to the contracts which express the government’s agenda.

The authoritative Charity Commission has expressed concern about the impact of public service delivery upon the independence of charities.

Second, a reluctance to criticise their statutory funders.

To be fair, the super charities have objected to the government’s harsh penal policies, the treatment of asylum seekers, and the complications of the tax credit payments system. But they draw back from attacking the system itself.

They wouldn’t breathe a word against royalty who own wealth that, if redistributed, could lift many out of poverty.

Many social problems spring from inequality, but they do not argue that the incomes of the very rich be reduced. They dare not point out that the Blairs own five properties while thousands are homeless.

Third, the contract culture is what academics Michael Lavalette and Iain Ferguson call “soft” privatisation.

Following Tony Blair’s determination to undermine public services, in 2005 alone, some £54 billion of services were contracted out to private and voluntary agencies. They remove direct accountability from democratic control. They stimulate competition not cooperation.

As Alison Hopkins, author of a report on the subject for the National Consumer Council, indicates, the emphasis can be on driving down costs not quality of service.

Steve Davies, a researcher at Cardiff University, explains that there is no evidence that voluntary bodies run better services than the state.

Nonetheless, the contract culture will multiply. New Labour has appointed a task force that includes the chiefs of the charities Turning Point and Mencap to see how it can be accelerated.

Fourth, the reinforcement of inequality. The super charities pay huge salaries to top management. Over a third are paid in excess of £100,000.

Clearly, these rich leaders contribute to the poverty and inequality which stimulate the problems their agencies are intended to tackle.

Further they appoint themselves as anti-poverty spokespersons who advise New Labour. Martin Narey of Barnardo’s (salary about £120,000) boasts child poverty is their number one campaign.

Wealthy, well-housed and well-pensioned, what do they know about it?

Lord Adebowale, whose own organisation Turning Point is 96 percent funded by the state, says it is better to be sitting at the table discussing policy than shouting outside the gates.

He does not consider who is excluded from the table, namely the leaders of grassroots organisations and poor people themselves.

The powerful charity leaders will get richer and receive their establishment gongs and titles. The poor will still be poor. The class system is maintained.

The class bias of the big charities is further seen in who controls them.

Users may be allowed on local committees, but they do not control the committees that decide policies, salaries and budgets. These are more likely to be in the hands of the posh and the powerful.

Finally, in grabbing the money, the elite charities harm the small ones.

Thousands of community groups are run by local people – who set the agenda and frequently hold values and practices like equality, mutuality and collectivity.

Jon Cruddas MP acknowledges that they have developed new forms of local social solidarity and community activity.

Over 68 percent of community groups and other small agencies have suffered as local authorities have cut grants in order to pour money into contracts.

The super charities often have millions in unrestricted reserves yet insist on taking grants from charitable trusts, the Lottery, Children in Need etc. So there is less for the small agencies.

Former local government minister David Miliband suggested that the wealthy charities should give to community groups. Fat cats, fat chance.

Trade unions should back grassroots activities rather than the main political parties. As individuals, if we want to give to charities, we should back those which are rooted in our neighbourhoods.

Bob Holman was an academic and then spent 25 years working and living in deprived areas.

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Tue 26 Jun 2007, 18:38 BST
Issue No. 2057
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