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by Jay Kennedy, Head of Policy, Directory of Social Change
Five things we think will dominate debate in the coming months, from a voluntary sector policy perspective:
1) How, where and when spending cuts happen (the obvious one).
More information about where and when the cuts will happen has been revealed in recent days. The Government has scheduled an Emergency Budget for 22 June, and a Comprehensive Spending Review in the autumn. David Laws has only just outlined £6.2 billion of cuts to be brought in this year. All quangos are clearly in the firing line, targeted for £600 million in savings, with some already being scrapped.
Add in that the Cabinet Office is tasked with saving £79 million, and there is every possibility that Capacitybuilders and Futurebuilders in particular could be hit hard. It isn’t yet certain exactly how cuts to other departmental spending will affect work done by the voluntary sector, and we probably won’t have a clear picture until 22 June. But it might be stating the obvious to say that the issue of cuts has the potential to sideline everything else – for society and politics as a whole, not just the voluntary sector.
2) Payment by results.
The new Government has made it a clear priority to pay providers of public services by the results they achieve and the Lib Dems seem to have agreed to go along with it. This policy is already well developed for areas like welfare-to-work and prisons/offenders. For charities which work with offenders for example, payment terms of contracts would be linked to reducing reoffending rates. The first draft of the coalition agreement said:
- The parties agree to end all existing welfare-to-work programmes and to create a single welfare-to-work programme to help all unemployed people get back into work.
- The parties agree to realign contracts with welfare-to-work service providers to reflect more closely the results they achieve in getting people back into work.
At best, there will be some chaos as existing arrangements are reorganised. At worst, contracts will be cancelled with little notice or consultation. There will be huge practical problems too with paying by results, as it depends on being able to measure results fairly and accurately within a specified time frame, which may not be realistic. Cash flow and up-front costs will also make it difficult for charities to operate under this system.
3) A ‘Big Society’ Bank.
A ‘social bank’ that would invest money from bank accounts which are ‘dormant’ (i.e. their owner is deceased or not known) for social purposes has been proposed for some years. The Conservatives made it a clear priority for their social enterprise and charity policy, and it appears in the longer version of the coalition agreement. However, details about how it would work, and how it would be different from the version the previous Government proposed, have been few. Previous Conservative policy papers link the Bank with the idea of ‘social enterprise zones’ – deprived areas where tax concessions would be granted to help development.
4) Changes to the Lottery.
Another long-standing commitment from the Conservatives is to make the Lottery more independent from political control and to reorient it back to its ‘original purposes’ of the arts, heritage, sport and ‘good causes’. DCMS has just launched a consultation on proposals to change how lottery revenues are distributed.
Under the proposals, the BIG Lottery Fund’s share would go from 50% to 46% in 2011, and from 46% to 40% in 2012. The shares distributed for sports, arts and culture would rise equally as BIG’s share reduced. The Conservatives have also stated they would prevent BIG from distributing any money to public bodies, which they claim will mean the total amount of money going to voluntary organisations will not drop. However, currently BIG is above their target of giving 80% of its funds to voluntary sector groups.
5) Local government reform.
The coalition agreement states that: "The parties will promote the radical devolution of power and greater financial autonomy to local government and community groups. This will include a full review of local government finance." Every new Government seems to promise this, but few deliver. Do they mean it? The recent announcement from David Laws about ‘de-ringfencing’ local authority budgets is intended to show that they do. A ‘Decentralisation and Localism Bill’ has also been announced in the Queen’s speech.
Interestingly, the former Shadow Charities Minister Greg Clarke has been appointed as a junior minister in the Communities and Local Government department with responsibility for ‘devolution.’ His relationship with Nick Hurd, the new Minister for Civil Society at the rebranded Office for Civil Society will be important.