We wrote in this morning’s FT that Volunteering England, which offers training to volunteers, may have to close 30 of its centres around the country. The charity is also set to lay off staff, as are the NCVO (National Council for Voluntary Organisations) and NAVCA (National Association of Voluntary and Community Action).
The Labour party argues that the estimated cuts to the sector will be £1.1bn next year and £3.1bn annually by 2014/15 – equivalent to 24 per cent of statutory funding for the civil sector. A group of charities are collating where the cuts are falling at this map, which already has around 200 local examples of reductions to funding. By the summer that is likely to run into the thousands.
Meanwhile Francis Maude faced criticism last night from Camila Batmanghelidjh, founder of the charity Kids’ Company, on Newsnight. She said:
“I’m waiting for some leadership in it and some structure. I’m very saddened that the debate is presenting itself as a division between the voluntary forces doing something in the community, and the state. Actually, what really works – and where the Big Society would really succeed – is where there is an infrastructure that supports both. And that’s lacking.”
The comments are damaging because Batmanghelidjh was at the launch of the original Big Society, where she was sat at the right hand of David Cameron.
It is still too early to see the sweeping impact of the cuts to councils’ budgets; ministers are insisting that they should trim their own bureaucracies before cutting grants to voluntary groups.
But infrastructure will surely suffer. I wrote this morning about Hammersmith & Fulham council, which is selling off 9 properties after a vote last night. Four of them are occupied by charities which will now have to find commercial premises charging more than double the rent. Will they all survive? This west London example is tiny but will be repeated thousands of times across the country in the coming months.
Already many charities are considering mergers to deal with funding cuts across the sector, according to Caron Bradshaw, chief executive of the Charity Finance Directors’ Group. Others are having to cut wages for some existing staff to “minimum wage levels”.
Ms Bradshaw told me there has been strong anecdotal evidence of deep cuts to helplines such as debt consultant services. She said the cuts were an opportunity for the charity sector to transform the way it ran itself, but she admitted: “Some of them will be wiped out by the cuts, especially if they currently get 100 per cent of their income from local government.”
The CFDG is lobbying the Treasury to change the way that charities are currently not exempt from VAT if they share services, a situation which is a disincentive for them to pool back office functions. “We’re making the argument that people aren’t doing this much at the moment so to exempt it wouldn’t cause a loss to the Treasury,” she said. It certainly seems an area worth exploring by George Osborne ahead of the Budget.
Jim Pickard
Kiran Stacey