06 June 2008
Voluntary sector leaders have welcomed Conservative Party proposals to encourage charities to make a profit from providing public services.
A main plank of the government's reform plans has been a greater role for voluntary organisations in public service provision.
Now, in a policy green paper published on June 3, the Conservatives have made their pitch for the same territory.
The government has repeatedly emphasised 'full-cost recovery' – that charities should be paid in full for the costs of services they deliver. But the Conservatives' paper cites Charity Commission figures showing that only 12% of voluntary sector contracts cover their costs.
It promises that a Conservative government would amend the Compact between the voluntary sector and the government to make it 'the norm' that charities are paid 'in line with commercial practice'.
'We believe that a successful project should earn a competitive return on investment,' says the paper, A stronger society: voluntary action in the twenty-first century.
Stephen Bubb, head of the Association of Chief Executives of Voluntary Organisations, said the proposals addressed issues 'of top concern'.
'It's great to see plans to develop our role in transforming public services, reducing regulation, strengthening the compact and improving contracting,' he added. 'Recognition that we should be making a profit from contracts is spot on and we look forward to this policy being implemented by Tory local authorities.'
Ann Blackmore, head of policy at the National Council for Voluntary Organisations, pointed out that charities were already permitted to make a surplus, as long as this was reinvested in meeting their charitable purposes.
'We welcome this recognition that the sector should be entitled to make a profit,' she said.
Third sector minister Phil Hope, speaking at a National Council for Voluntary Organisations conference on June 3, said: 'The public sector needs to become a better partner to the third sector.
'I am working to ensure that long-term sustainable funding through a mix of grants and contracts becomes the norm.'
PFjun2008
