The government is threatening the advocacy role of the third sector and potentially stifling its ability to innovate with a ‘contract culture’, Stronger charities for a stronger society out today says.
The House of Lords Select Committee on Charities says devolution offers a significant opportunity for charities to forge closer relationships with decision-makers.
But it believes the government is “insufficiently committed to engagement with charities” to help devolution work in practice.
Baroness Pitkeathley, chair of the committee, said: “Charities are the lifeblood of society.
“Yet for them to continue to flourish, it is clear that they must be supported and promoted.”
She added: “We found that charities lead the way with innovation, but that this is at risk of being stifled by the 'contract culture'.
"And while advocacy is a sign of a healthy democracy, and is a central part of charities' role, this role has been threatened by government.”
Grant funding from government for the charity sector has declined from £6.1bn in 2003/04 to £2.8bn in 2013/14, according to estimates from the trade organisation the NCVO.
With the grant diminishing, charities have been increasingly competing for public sector contracts.
The select committee says this ‘contracts culture’ has benefitted the largest charities at the expense of smaller ones – as they were best placed to secure increasingly large-scale contracts offered by central and local government.
It recommends contracting authorities embraced recent changes to public procurement rules, which allow for smaller contracts, giving charities better access to funding opportunities.
Commissioners should consider core costs – such as ‘back office’ expenses – when commissioning and award work on impact and social value rather than just lower cost, the report says.
The government and Charity Commission should ensure regulations and guidance do not restrict charities’ vital campaigning and advocacy roles, the committee suggests. The group of Lords also says charities needed support with digital technology and innovation, such as bringing in trustees with digital expertise.
A Local Government Association spokesperson said: “As devolution provides local areas with greater freedom over the design of public services we expect [charities and voluntary sector] will continue to develop their role in shaping effective local public services.
“We would encourage the voluntary sector to engage with the devolution agenda because it stands to provide considerable opportunities for large and small charities alike.”
