In February, BBC Radio 4’s The Moral Maze covered charity in the UK. The panel members were Michael Portillo, Anne McEvoy, Giles Fraser and Matthew Taylor, chaired by Michael Buerk.
Not surprisingly, the conversation covered charity and its relationship with government and whether charity should be able to use part of its funding from government to lobby government.
These questions are important because charities receive government funding of £13 billion out of a total annual income of the sector of £40 billion (NCVO Civil Sector Almanac).
In February 2016, the Cabinet Office announced that new and renewed government grant agreements with charities from 1 May 2016 will contain a new clause to ensure that ‘taxpayers’ money is spent on improving people’s lives and good causes, rather than lobbying for new regulation or increased funding’. The government added that the new clause would not prevent charities in receipt of government grants from using funds from other sources for lobbying.
The Cabinet Office did not consult with the charity sector in imposing this significant contractual change.
Cabinet Office Minister Matthew Hancock said: “Taxpayers’ money must be spent on improving people’s lives and spreading opportunities, not wasted on the farce of government lobbying government. The public sector never lobbies for lower taxes and less state spending, and it’s a zero-sum game if Peter is robbed to pay Paul.“
An alternative analysis is to view funding spent on ‘improving people’s lives and good causes’ and on lobbying as a false dichotomy. Charites were running schools, hospitals, rest homes and refuges for rough sleepers for many years, if not centuries, before government took on responsibility for some or all of this provision after 1945. Charities continue with this work today, funded in part by government and also by individuals (£18 billion) and the private sector (£2 billion) (NCVO Civil Sector Almanac).
By law, the trustees are responsible for spending this funding. The trustees must act in their charity’s best interests and must manage its funding and spending responsibly. They must use their judgement to balance their charity’s spending between service provision for their beneficiaries (both current and prospective) and lobbying. Lobbying is not necessarily criticism of government; it is a way for beneficiaries to have their voices heard, especially those in vulnerable or disadvantaged circumstances. Lobbying by charities is regulated by the Charity Commission. Charities are prohibited for lobbying for any particular political party and can only lobby in the interests of their beneficiaries.
Charities are well-placed to understand the public policy changes which would improve the lives of their beneficiaries and enable public money to be spent most effectively. Government and charities should work together in a respectful, collegiate way for the benefit of charity beneficiaries and wider civil society.
I’m not happy with this change in government grant agreements. I call on the government to postpone the change and consult with the charity sector, to ensure that any change is proportionate and evidence-based.
My view is that charity doesn’t just rescue people from rivers. Charity also heads upstream, to understand how people fall into rivers and stop this from happening in the first place.