Philip Booth: The Big Society will only come into being when the Government stops trying to create it and instead unleashes a tide of philanthropy

Professor Philip Booth is Editorial and Programme Director at the Institute of Economic Affairs.

The Government reportedly feels that its Big Society programme has stalled. It is not surprising. The coalition’s idea of the Big Society often seems to involve no more than getting a few people round a table to discuss how the Government can design the Big Society. Philip Blond comes up with some interesting and radical ideas, but he is too suspicious of the free economy which is a necessary (but not sufficient) condition for a Big Society.

The Big Society section of Number 10’s website talks about the importance of transferring power from Whitehall to individuals but the concrete action points send a different message. Key programmes involve the government establishing a “Big Society Bank”, a “National Citizens’ Service”, and government funding for relevant initiatives. The Big Society will only come into being when the government stops trying to create it and starts to roll back the state. The Big Society in welfare flourished when the state was not responsible for welfare. The Big Society in finance – mutualism and so on – thrived when the government did not guarantee and regulate the financial system. Unfortunately, Blond, Hilton and so on lack the sense of history that is necessary for them to appreciate this.

There seems to be a fear that if the Government leaves things entirely to the people not enough will be done. On the contrary, it is the case that if the Government insists on trying to manage the creation of the Big Society, nothing will happen. Whilst I do not expect the Government to liberalise the financial sector or roll back the welfare state any time soon, it can do one thing. It can create the conditions in which philanthropy can thrive. The Government should resist the calls to fund the Big Society by giving more grants to charities – this will just make charities clients of the state, but it should strip away the regulations that surround charities and encourage charitable giving.

The success of charity – as opposed to state relief for the poor – is extraordinary. Private charities are directly accountable to those who give their money and time. People will not waste their freely-given resources on a charity unless it achieves the desired results. The efficiency and scale of Rotary initiatives in under-developed countries, for example, is outstanding. Also, those working on the ground dealing with their communities really understand the needs of the people they are trying to help. Pope Benedict – who seemed interested in the Government’s Big Society plans on his recent visit – once wrote:

“The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person—every person—needs: namely, loving personal concern.”

Perhaps one reason why people are so keen to have the state provide for people’s needs – and be at the helm of the Big Society – is because it is thought that philanthropy can never do enough. Whilst the government can force us to pay taxes, if we are left to our own devices we will not do sufficient out of charity.

Yet the scale of philanthropy is stunning. US philanthropy is over $300bn – and we should remember that published figures tend to under-estimate the real totals. According to the Hudson Institute, US giving of time and money to under-developed countries is greater than government assistance from all OECD countries combined: and private giving is so much more effective.

Indeed, there seems to be a relationship between how socialistic a country is and the amount of philanthropy it generates – having the government put its hand in its citizens’ pockets is a substitute for people putting their own hands in their own pockets. The data is incomplete but the Hudson Institute estimates that individual giving to poor countries in the UK is $6.3bn; in France, the number was only $1bn. Unsurprisingly US philanthropy outstrips all non-US philanthropy put together.

The Government’s model of the Big Society is essentially corporatist. The Government wishes to work with businesses, charities, individuals and local government to engineer the “Big Society”. It looks rather like the model we used to run our economy in the 1970s. Admittedly, it is better than the socialist model whereby people are told that they have fulfilled their obligations to society if they stick their hands in other people’s pockets to give money to government bureaucracies. However, the Government really should let go. It should develop policies that will unleash a tide of philanthropy.

We do not need an “Office for Civil Society” or a “National Citizens’ Service”. We need to unburden charities and volunteers and tax people less. Perhaps we should have additional time-limited tax incentives for certain types of philanthropy. For example, for a short while, those giving to university research and bursary endowments, to drug and alcohol dependency projects, and to underdeveloped countries could be allowed to write that donation off their tax bill pound-for-pound. We must be careful not to distort the charitable sector with too many tax favours but this money could be deducted from relevant departmental spending budgets and we know that every penny of it would be better spent than the government would spend it.