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Cuts, dependency and neo-liberal nonsense

The news was filled with grim stories of local authorities cutting support to over 2,000 charities estimated to be in excess of £100m. False Economy compiled the data (which you can download for yourself) from over 200 responses to Freedom of Information requests they submitted. Well done to them for bringing such attention to what’s really happening on the ground in local areas.

We’ve known that for some time that charities were having their funding cut and much of this information is in the public domain, including a collaborative effort to crowdsource cuts to the sector and Patrick Butler’s excellent Guardian Cuts Blog.

It’s worth pointing out that the figures False Economy have produced are really just the tip of the iceberg – they only record local authority (grant) funding direct to the voluntary sector. They don’t include health (PCT) funding, central government funding and contracts that the not for profit sector deliver. Also the data seems to be based on responses gathered in March and April, at which time many of the critical decisions about funding for the sector were still unknown. £100m doesn’t begin to get close to the true extent of how public spending cuts are impacting on charities and community organisations.

But what’s really interesting about the False Economy story is the reaction it has elicited. Peter Kyle from ACEVO gave a measured response on the BBC News Channel and Karl Wilding from NCVO could be heard gnashing his teeth on Twitter over the estimates and some of the more extreme reactions to it (more of that in a moment). The government were quick to respond, with communities minister Bob Neill talking about helping charities to reduce their dependency on the state and (incorrectly) suggesting that charities received £14bn in grants from government. Not true. The vast majority of this is actually from contracts (around £10.5bn) with just over £3.5bn in grants. Obviously this is still a lot of money, but it is quite different to £14bn. Ministers ought to be better briefed.

To hear the government trotting out a line about charity dependency on the state gets my blood boiling….

If anything surely it’s the other way round? The state is hugely dependent on voluntary effort filling gaps and delivery support to vulnerable people that would otherwise have to be borne by the public purse.

Research by the University of Leeds and Careers UK calculates that the value of unpaid care as a staggering £87bn per year. That is the amount that voluntary effort is saving the state each year – more than the entire cost of the whole NHS! If that effort were to be withdrawn the state would have to provide it and the effect on the public finances would be as dramatic as the banking crisis. In case you’re struggling to get your head round what such a large figure means, that’s equivalent to:

  • £1.67bn per week
  • £238m per day
  • £9.93m per hour
  • £166,000 per minute
  • £1,436 per year for every single person in the UK

That’s just the figure for social care – an important part, but only one part, of charitable activity in the UK. Who is dependent on whom?

And if that wasn’t enough to rattle your cage (it was for me!) then feast on this neo-liberalist drivel…. Donal Blaney’s ‘Taxpayer Funding of Charities Must End’ suggested charities that receive money from the state ‘are not charities and…funding should cease forthwith’. In a display of logic my 7 year old daughter would be ashamed of, he goes on to suggest that providing state funding to charities is the antithesis of charity and should be stopped. Instead the market should determine which charities should survive or perish on the basis of whether they are able to secure sufficient philanthropic donations or not.

Oh dear. What is he talking about?

Presumably the bank bailouts were a bad idea and they should have been left to collapse? Or are banks ‘too big to fail’? If so, surely the figures above on social care fall into the same category?

Hmmmm…..

And what about the huge government subsidies that support private sector firms across a wide range of policy areas – transport and housing spring immediately to mind. We’d better get rid of those hadn’t we, since they must be fostering a dependency culture within the private sector.

Does this argument extend to charities delivering services that the state can’t or won’t? Surely free-market economic theory would applaud charities bidding to deliver public services (more efficiently than the state)? So perhaps he is talking solely about public sector grants to charities.

The fact is that much of the work undertaken by charities that is not delivering a public service saves the state a huge amount of money. Whether it’s preventing health problems, helping people to sustain their tenancies, reducing offending, or giving people support to fulfil their potential in the labour market or education, they all save the state considerable amounts of money. Can we afford to deal with the consequences and costs of that activity being stopped?

To be honest I think I’ve probably already expended more energy than this half-baked nonsense warrants. But can we please hear no more about ‘charities being dependent on government’.

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