Some Council grants to charities should be cut

Mark Wallace says cutting Council grants to charities could make sense - it depends what the groups are doing

The latest strand of concern to appear about where the axe will fall in council spending cuts is that the charity sector (or the “Third Sector” as some now prefer to call them) is worried that councils will see them as a “soft target”.  The National Council of Voluntary Organisations has expressed its concern that so many charities are now dependent on taxpayers’ money from councils that some may go under entirely. The NCVO also warned that essential services provided by charities for councils may be lost.

This raise two separate issues – aside from the ethical question of whether charity reliance on the state is harming charitable enterprise in itself, which I have written about elsewhere. 

First, should charities be providing “essential services” at all? Some would argue that it is the job of councils to do that themselves.

Personally, I think it can be a good thing if a charity, using as many volunteers as possible, provides things like care or transport for those who need it.

The Big Society, whilst far from being an idea I subscribe to entirely, is about encouraging citizens to start looking out for each other if it is about anything. Furthermore, charities have the potential to do the job better and with more understanding than a monolithic bureaucracy. The danger comes when charities become entirely co-opted by the state and abandon proper, voluntary fundraising.

If some charities really are providing “essential services” at a good value, then surely they will not be cut in the current spending review. By definition, cutting such a charity would leave councils with the task of providing the same service but with the added cost of doing so themselves with all the attendant staff costs and inefficiencies.

This leads us to the separate issue – and the real problem. The NCVO is right to say that some funding to charities will be cut, but it will not be funding for essential services delivered at good value. It will be spending that councils find they can do without.

We all know of charities that provide politically correct training to council staff, public arts projects for which there is little demand or – worst of all – lobbying and campaigning at taxpayers’ expense. When councils come to review their spending it is these that will be cut out, rightly, as unnecessary.

It will be good news when councils cut this spending back, but doing so should not allow them to dodge the crucial question: why on earth were they funding these things in the first place?

Warren Buffet once famously said “It is only when the tide goes out that you find out who has been swimming naked.” In terms of public finance, the tide has gone out in a big way and some truly wasteful council grants to charities are
about to exposed for all to see.

When councils that have been used to spending taxpayers’ money willy nilly on unnecessary projects are forced to admit that they can be done without, there should be a reckoning. Taxpayers have every right to ask why money was spent where it was not needed – and the answers will be very interesting to hear.